SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

---

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 25, 2005

Commission file number 1-8572

TRIBUNE COMPANY(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

36-1880355(I.R.S. Employer Identification No.)435 North Michigan Avenue
Chicago, Illinois(Address of principal executive offices)

60611(Zip Code)


Registrant's
telephone number, including area code: (312) 222-9100
Securities registered pursuant to Section 12(b) of the Act:

Title of each class





Name of each exchange on
which registeredCommon Stock ($.01 par value)





New York Stock ExchangePreferred Share Purchase Rights

}



Chicago Stock Exchange{

Pacific Stock Exchange2% Exchangeable Subordinated Debentures Due 2029

New York Stock Exchange


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ý    No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (check one): Large accelerated
filer ý    Accelerated filer o    Non-accelerated
filer o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act
Rule 12b-2). Yes o    No ý

Aggregate market value of the Company's voting and non-voting common equity held by non-affiliates on June 24, 2005, based upon the
closing price of the Company's Common Stock as reported on the New York Stock Exchange Composite Transactions list for such date: approximately $8,270,000,000.

At
February 17, 2006, there were 302,331,899 shares outstanding of the Company's Common Stock ($.01 par value per share), excluding 83,441,765 shares held by subsidiaries and
affiliates of the Company (see Note 14 to the Company's Consolidated Financial Statements).

The
following document is incorporated by reference, in part:

Definitive
Proxy Statement for the registrant's May 2, 2006 Annual Meeting of Shareholders (Part III, to the extent described therein).



---



INDEX TO TRIBUNE COMPANY  2005 FORM 10-K

|Item No. |                                                                                                              |                                                                                                                           |                                                       |    | Page
|-------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | -- | ----
|PART I  
|1.       | Business                                                                                                     |                                                                                                                           | 1                                                    
|         |                                                                                                              | Significant Events                                                                                                        |                                                       | 1 
|         |                                                                                                              | Business Segments                                                                                                         |                                                       | 2 
|         |                                                                                                              | Publishing                                                                                                                |                                                       | 3 
|         |                                                                                                              | Broadcasting and Entertainment                                                                                            |                                                       | 9 
|         |                                                                                                              | Investments                                                                                                               |                                                       | 14
|         |                                                                                                              | Non-Operating Items                                                                                                       |                                                       | 15
|         |                                                                                                              | Governmental Regulation                                                                                                   |                                                       | 15
|         |                                                                                                              | Employees                                                                                                                 |                                                       | 17
|         |                                                                                                              | Executive Officers of the Company                                                                                         |                                                       | 17
|         |                                                                                                              | Available Information                                                                                                     |                                                       | 18
|1A.      | Risk Factors                                                                                                 |                                                                                                                           | 19                                                   
|1B.      | Unresolved Staff Comments                                                                                    |                                                                                                                           | 22                                                   
|2.       | Properties                                                                                                   |                                                                                                                           | 22                                                   
|3.       | Legal Proceedings                                                                                            |                                                                                                                           | 23                                                   
|4.       | Submission of Matters to a Vote of Security Holders                                                          |                                                                                                                           | 26                                                   
|PART II 
|5.       | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |                                                                                                                           | 27                                                   
|6.       | Selected Financial Data                                                                                      |                                                                                                                           | 27                                                   
|7.       | Management's Discussion and Analysis of Financial Condition and Results of Operations                        |                                                                                                                           | 28                                                   
|7A.      | Quantitative and Qualitative Disclosures About Market Risk                                                   |                                                                                                                           | 53                                                   
|8.       | Financial Statements and Supplementary Data                                                                  |                                                                                                                           | 57                                                   
|         |                                                                                                              | Report of Independent Registered Public Accounting Firm                                                                   |                                                       | 59
|         |                                                                                                              | Management's Responsibility for Financial Statements and Management's Report on Internal Control Over Financial Reporting |                                                       | 61
|         |                                                                                                              | Consolidated Statements of Income for each of the three fiscal years in the period ended Dec. 25, 2005                    |                                                       | 63
|         |                                                                                                              | Consolidated Balance Sheets at Dec. 25, 2005 and Dec. 26, 2004                                                            |                                                       | 64
|         |                                                                                                              | Consolidated Statements of Shareholders' Equity for each of the three fiscal years in the period ended Dec. 25, 2005      |                                                       | 66
|         |                                                                                                              | Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended Dec. 25, 2005                |                                                       | 68
|         |                                                                                                              | Notes to Consolidated Financial Statements                                                                                |                                                       |   
|         |                                                                                                              |                                                                                                                           | Note 1: Summary of Significant Accounting Policies    |    | 69  
|         |                                                                                                              |                                                                                                                           | Note 2: Changes in Operations and Non-Operating Items |    | 77  
|         |                                                                                                              |                                                                                                                           | Note 3:NewsdayandHoy, New York Charge                 |    | 80  
|         |                                                                                                              |                                                                                                                           | Note 4: Inventories                                   |    | 81  
|         |                                                                                                              |                                                                                                                           | Note 5: Goodwill and Other Intangible Assets          |    | 82  
|         |                                                                                                              |                                                                                                                           | Note 6: TMCT I and TMCT II                            |    | 84  
|         |                                                                                                              |                                                                                                                           | Note 7: Investments                                   |    | 87  
|         |                                                                                                              |                                                                                                                           | Note 8: Long-Term Debt                                |    | 88  
|         |                                                                                                              |                                                                                                                           | Note 9: Contracts Payable for Broadcast Rights        |    | 91  
|         |                                                                                                              |                                                                                                                           |                                                       |    |     

---



|PART II (continued)
|-------------------
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|9.                 
|9A.                
|PART III           
|10.                
|11.                
|12.                
|13.                
|14.                
|PART IV            
|15.                
|* * * * *          
|                   
|                   
|                   
|                   

---





PART I

ITEM 1. BUSINESS.

Tribune Company ("Tribune" or the "Company") is a media and entertainment company. Through its subsidiaries, the Company is engaged in newspaper publishing,
television and radio broadcasting and entertainment. The Company was founded in 1847 and incorporated in Illinois in 1861. As a result of a corporate restructuring in 1968, the Company became a
holding company incorporated in Delaware. References in this report to "the Company" include Tribune Company and its subsidiaries, unless the context otherwise indicates. The information in this
Item 1 should be read in conjunction with the information contained in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's
consolidated financial statements and related notes thereto included in Item 8. Certain prior year amounts have been reclassified to conform with the 2005 presentation. These reclassifications
had no impact on reported prior year total revenues, operating profit or net income.

This
Annual Report on Form 10-K ("Form 10-K") contains certain forward-looking statements that are based largely on the Company's current
expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the
forward-looking statements including, but not limited to, the items discussed in Item 1A, "Risk Factors." Such risks, trends and uncertainties, which in some instances are beyond the Company's
control, include: changes in advertising demand, circulation levels and audience shares; regulatory and judicial rulings; availability and cost of broadcast rights; competition and other economic
conditions; changes in newsprint prices; changes in the Company's credit ratings and interest rates; changes in accounting standards; adverse results from litigation, governmental investigations or
tax related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; the effect of acquisitions, investments and divestitures; the effect of derivative transactions;
and the Company's reliance on third-party vendors for various services. The words "believe," "expect," "anticipate," "estimate," "could," "should," "intend" and similar expressions generally identify
forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this filing. The Company undertakes no
obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Significant Events

On Jan. 8, 2006, Newsday's six collective bargaining units voted to accept new four-year contracts that include position eliminations, work
rule improvements, lower cost retirement plans and an increase in employee health care contributions, resulting in pretax savings of approximately $7 million in 2006 and more than
$10 million annually thereafter. The Company expects to record one-time pretax charges of approximately $15 million in the first quarter of 2006 related to severance and
other payments associated with the new contracts.

On
Jan. 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its television stations currently affiliated with the WB Network
(including those in New York, Los Angeles and Chicago) with a new broadcast network, The CW Network, being launched in the fall of 2006 by Warner Brothers Entertainment and CBS. The new network will
air a portion of the programming currently on the WB Network and the UPN Network, as well as new programming. The WB Network will shut down at that time. The Company will not incur any costs related
to the shutdown of The WB Network. Three of Tribune's current WB network affiliates (Philadelphia, Atlanta and Seattle) will become independent stations at that time. When the regulatory approval of
the new network is received and the new affiliation agreements become effective, the Company will write-off its WB affiliation agreement intangible assets for Philadelphia, Atlanta and Seattle. This
write-off will

1

---



most
likely occur in the second or third quarter of 2006 and will total approximately $15 million before taxes.

Business Segments

The Company's operations are divided into two industry segments: publishing and broadcasting and entertainment. These segments operate primarily in the United
States. Certain administrative activities are not included in either segment, but are reported as corporate. These segments reflect the way the Company sells its products to the marketplace, manages
operations and makes business decisions.

The
following table sets forth operating revenues and profit information for each segment of the Company (in thousands):

|                            |                                | Fiscal Year Ended December |          
|--------------------------- | ------------------------------ | -------------------------- | ---------
|
|Operating revenues:         |                                |                            |          
|                            | Publishing                     |                            | $        
|                            | Broadcasting and entertainment |                            |          
|                            |                                |                            |          
|Total operating revenues    |                                | $                          | 5,595,617
|                            |                                |                            |          
|Operating profit (loss)(1): |                                |                            |          
|                            | Publishing                     |                            | $        
|                            | Broadcasting and entertainment |                            |          
|                            | Corporate expenses             |                            |          
|                            |                                |                            |          
|Total operating profit      |                                | $                          | 1,146,823
|                            |                                |                            |          

---

The following table sets forth asset information for each industry segment (in thousands):

|             |                                | Fiscal Year Ended December
|------------ | ------------------------------ | --------------------------
|
|Assets:      |                                |                           
|             | Publishing(1)                  |                           
|             | Broadcasting and entertainment |                           
|             | Corporate(2)                   |                           
|             |                                |                           
|Total assets |                                | $                         
|             |                                |                           

---

The Company's results of operations, when examined on a quarterly basis, reflect the seasonality of the Company's revenues. Second and fourth
quarter advertising revenues are typically higher than first and third quarter revenues. Results for the second quarter reflect spring advertising revenues, while the fourth quarter includes
advertising revenues related to the holiday season. Fiscal years 2005, 2004 and 2003 each comprised 52 weeks.

2

---



Publishing

The publishing segment represented 73% of the Company's consolidated operating revenues in 2005. Excluding Newsday, for the six months ended
September 2005, total average paid circulation for Tribune's 10 metro newspapers averaged 2.6 million copies daily (Mon.-Sat.) and 3.8 million copies Sunday, a decline
of 4.2% and 4.1%, respectively, from 2004. Newsday's 2005 circulation data has been withheld pending the results of an Audit Bureau of Circulations ("ABC") audit. The Company's primary daily
newspapers are theLos Angeles Times,Chicago Tribune,Newsday, South Florida
Sun-Sentinel,The Baltimore Sun,Orlando Sentinel, The Hartford Courant,The Morning Call,Daily Press, The AdvocateandGreenwich Time. The Company's publishing segment manages the websites of the Company's
daily newspapers and television stations, as well as other branded sites targeting specific communities of interest. The Company also owns entertainment listings, a newspaper syndication and media
marketing company, a Chicago-area cable television news channel and other publishing-related businesses.

Operating
revenues for the Company's three largest newspapers, including their related businesses, for the last three years were as follows (in thousands):

|                          |                                 | Fiscal Year Ended December
|------------------------- | ------------------------------- | --------------------------
|
|Operating revenues:       |                                 |                           
|                          | Los Angeles Times(1)            |                           
|                          | Chicago Tribune(1)              |                           
|                          | Newsday(1)                      |                           
|                          | Other newspapers and businesses |                           
|                          |                                 |                           
|Total publishing revenues |                                 | $                         
|                          |                                 |                           

---

The following table provides a breakdown of operating revenues for the publishing segment for the last three years (in thousands):

|             |            | Fiscal Year Ended December
|------------ | ---------- | --------------------------
|
|Advertising: |            |                           
|             | Retail     |                           
|             | National   |                           
|             | Classified |                           
|             |            |                           
|             |            | Total advertising         
|Circulation  |            |                           
|Other(1)     |            |                           
|             |            |                           
|Total        |            | $                         
|             |            |                           

---

3

---



The following table sets forth information concerning the Company's advertising volume for its daily newspapers (in thousands):

|                          |                           | Fiscal Year Ended December
|------------------------- | ------------------------- | --------------------------
|
|Full run inches:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total full run inches     |                           | 19,777                    
|                          |                           |                           
|Part run inches:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total part run inches     |                           | 20,112                    
|                          |                           |                           
|Total advertising inches: |                           |                           
|Full run:                 |                           |                           
|                          | Retail                    |                           
|                          | National                  |                           
|                          | Classified                |                           
|                          |                           |                           
|                          | Total full run            |                           
|Part run                  |                           | 20,112                    
|                          |                           |                           
|Total                     |                           | 39,889                    
|                          |                           |                           
|Preprint pieces:          |                           |                           
|                          | Los Angeles Times         |                           
|                          | Chicago Tribune           |                           
|                          | Newsday                   |                           
|                          | Other daily newspapers(1) |                           
|                          |                           |                           
|Total                     |                           | 14,929,047                
|                          |                           |                           

---

4

---



The following table sets forth information concerning the Company's circulation for its primary daily newspapers (in thousands):

|                           |  | Average Paid Circulation
For the Six Months Ended Sept.(1)
|-------------------------- |  | ----------------------------------------------------------
|
|
|Los Angeles Times          |  | 870                                                       
|Chicago Tribune            |  | 577                                                       
|Newsday(3)                 |  | NA                                                        
|South Florida Sun-Sentinel |  | 233                                                       
|The Baltimore Sun          |  | 249                                                       
|Orlando Sentinel           |  | 221                                                       
|Other daily newspapers(4)  |  | 428                                                       

---

Each of the Company's newspapers operates independently to most effectively meet the needs of the community it serves. Local management
establishes editorial policies. The Company coordinates certain
aspects of operations and resources in order to provide greater operating efficiency and economies of scale.

The
Company's newspapers compete for readership and advertising with other metropolitan, suburban and national newspapers, and also with television, radio, Internet services and other
media. Competition for newspaper advertising is based upon circulation levels, readership demographics, price, service, and advertiser results, while competition for circulation is based upon the
content of the newspaper, service and price.

The Chicago Tribune,South Florida Sun-Sentinel, Orlando
Sentinel,Daily Press,The Morning Call, The AdvocateandGreenwich Timeare printed in Company-owned production facilities. The Los Angeles Times, Newsday, The Baltimore SunandThe Hartford
Courantare printed on Company-owned
presses in production facilities leased from an affiliate (see Note 6 to the Company's consolidated financial statements in Item 8). The principal raw material is newsprint. In 2005, the
Company's newspapers consumed approximately 814,000 metric tons of newsprint. Average newsprint prices increased 16% in 2005 from 2004. The Company's newspapers are transitioning to lighter weight
newsprint that on a per ton basis costs more but yields more pages. The increase in newsprint cost per ton reflects increased market prices and the higher cost of lighter weight paper. Average
newsprint prices increased 12% and 4% in 2004 and 2003, respectively.

The
Company is party to an agreement with Abitibi Consolidated Inc., expiring in 2007, to supply newsprint based on market prices. Under the current agreement, the Company
purchased approximately 443,000 metric tons of newsprint in 2005, representing 56% of the Company's newsprint purchases and has agreed to purchase 450,000 metric tons in both 2006 and 2007, subject to
certain limitations, at prevailing market prices at the time of purchase. The Company is in the process of negotiating an amendment to this agreement, which among other things, would extend the
current agreement to 2009.

5

---



Los Angeles Times and Related Businesses

TheLos Angeles Timeshas been published continuously since 1881. The newspaper has won 37 Pulitzer Prizes,
including two in 2005. It is published every morning and is the largest metropolitan newspaper in the United States in circulation. The Los Angeles market ranks second in the nation in terms of
households. In its primary circulation areas of Los Angeles, Orange, Ventura, San Bernardino and Riverside counties, theLos Angeles Timescompetes for
advertising and circulation with 16 local daily newspapers and three daily national newspapers, with its largest local competitor having approximately 300,000 in average daily circulation. For the
six-month period ended Sept. 30, 2005, theLos Angeles Timesranked fourth and third in the country for average daily and Sunday
circulation,
respectively, according to ABC. Approximately 76% and 79% of the paper's daily and Sunday circulation, respectively, was home delivered in 2005, with the remainder primarily sold at newsstands and
vending boxes.

In
addition to the daily edition covering the Los Angeles metropolitan area, theLos Angeles Timespublishes daily Orange County, San
Fernando Valley, Inland Empire and Ventura County editions. Daily and semi-weekly community newspapers are either inserted into the paper in selected geographic areas or distributed to
homes and through vending machines to provide targeted local news coverage. The company operates latimes.com, an online expanded version of the newspaper featuring 50,000 content pages, which provide
entertainment, local, national and international news, and theenvelope.com, a comprehensive year-round awards web site. Through a subsidiary, EZ Buy & EZ Sell Recycler Corporation,
the company publishes a collection of 21 alternative classified papers in Southern California including titles such asRecycler, AutoBuys,Cycle & BoatBuys, Homes and Open Housesand Jobsand also operates recycler.com, an online version of the publications. The company owns 50% of California
Independent Postal Systems ("CIPS"),
which provides alternative distribution services for advertising preprints. MediaNews Group, Inc. owns the other 50% of CIPS. In December 2005, theLos Angeles
Timesannounced it would close its San Fernando Valley printing facility in January 2006 (see Note 2 to the Company's consolidated financial statements in
Item 8 for further discussion).

Chicago Tribune and Related Businesses

Founded in 1847, theChicago Tribuneis the flagship publication of the Chicago Tribune Company. The newspaper has
won 24 Pulitzer Prizes and is the largest circulation paper in Chicago and the Midwest. It ranks eighth among U.S. daily newspapers with an average daily paid circulation of approximately 577,000; and
fifth among U.S. Sunday newspapers with an average Sunday paid circulation of approximately 951,000. Approximately 80% of its weekday newspapers and 71% of its Sunday newspapers are home delivered.
Considered an industry leader in journalism and innovation, Chicago Tribune Company has grown into a multi-product, multi-channel news and information leader. Together with other media businesses it
operates, including chicagotribune.com,RedEyeandChicago Magazine, Chicago Tribune Company reaches
approximately 60% of adults in Chicagoland every week.

Other
businesses owned by Chicago Tribune Company include Tribune Direct Marketing, which provides integrated and comprehensive direct mail services, and Chicagoland Publishing Company,
which publishes a number of free guides in the real estate, automotive and help wanted categories. Chicagoland Publishing also publishes the monthly magazine Chicago, which earned a 2004 National
Magazine "Ellie" Award for general excellence.

Newsday and Related Businesses

Newsdayis published every morning and circulated primarily in Nassau and Suffolk counties on Long Island, New
York, and in the borough of Queens in New York City. The paper has been published since 1940 and has won 18 Pulitzer Prizes. The New York metropolitan area ranks first

6

---



among
U.S. markets in terms of households.Newsdaycompetes with three major metropolitan newspapers, daily regional editions of several national
newspapers and numerous daily, weekly and semiweekly local newspapers and free distribution newspapers. Approximately 70% of the paper's daily and 66% of its Sunday circulation is sold through home
delivery, with the remainder primarily sold at newsstands and vending boxes. See Note 3 to the Company's consolidated financial statements in Item 8 for a discussion of the charge
recorded in 2004 related to the anticipated settlement with advertisers regarding misstated circulation atNewsday.

Newsday, Inc.,
publisher ofNewsday, also publishesDistinction, a magazine serving
Long Island's households, issued ten times per year;Long Island Parents & Children, a magazine for families, issued twelve times per year; and Long Island
Weddings, a magazine for brides, published two times per year. Newsday, Inc. has several websites including newsday.com and
nynewsday.com, which are online versions of the newspaper. Newsday, Inc.'s subsidiary, Star Community Publishing Group, LLC, publishes 181 pennysaver editions in Nassau and Suffolk counties on
Long Island, New York, and in the boroughs of Queens, Brooklyn and Staten Island in New York City. Additionally, the results ofamNewYork, a free daily
newspaper in New York City targeting young, urban commuters, are reported as a part of Newsday, Inc.

Other Newspapers

The Company's other primary daily newspapers areSouth Florida Sun-Sentinel, The Baltimore Sun, Orlando Sentinel, The Hartford
Courant,Daily Press,The Morning Call,The
AdvocateandGreenwich Time. Each of these newspapers is published every morning.

The South Florida Sun-Sentinelis the major daily newspaper serving the Broward/Palm Beach County market, leading in both
circulation and readership. The Miami/Fort Lauderdale/Miami Beach metropolitan area, which includes Broward and Palm Beach counties, ranks 6th in the nation in terms of households. Approximately 74%
of the paper's daily and 69% of its Sunday circulation is sold through home delivery, with the remainder primarily sold at newsstands and vending boxes.

Sun-Sentinel
Company, publisher of theSouth Florida Sun-Sentinel, also serves the news and information needs of
South Florida through sun-sentinel.com, its breaking news and information website; southflorida.com, a South Florida entertainment website;el
Sentinel, a weekly Spanish language newspaper; weekly community newspapers; niche publications; and extensive television and radio partnerships, including its close working
relationship with Tribune Broadcasting's WBZL-TV, Miami, the WB Network affiliate serving South Florida.

Other
publications produced by Sun-Sentinel Company include:City & Shore, a bimonthly lifestyle magazine; City Link, an alternative weekly newspaper;Florida New Homes & Condo Guide, a comprehensive
bimonthly guide to South Florida real estate;Jewish Journal, a collection of weekly newspapers serving South Florida's Jewish community; and South Florida
Parenting, a monthly magazine providing parenting information and resources for local families.

The Baltimore Sun, Maryland's largest newspaper, has published a daily newspaper since 1837 and has won 15 Pulitzer Prizes. The Baltimore
market ranks 20th in the United States in number of households. For the six-month period ending Sept. 25, 2005,The Baltimore Sunwas
ranked the 22nd largest newspaper in the country by Sunday circulation according to ABC.The Baltimore Suncompetes withThe
Washington Postin Anne Arundel and Howard counties, withThe Annapolis Capitalin Anne Arundel County and with The Carroll County Timesin Carroll County. It also competes with regional editions of national daily newspapers, as well as other local dailies and
weeklies. Approximately 79% of the paper's daily and 64% of its Sunday circulation is sold through home delivery, with the remainder primarily sold at newsstands and vending boxes.

7

---



The
Baltimore Sun Company's subsidiaries, Patuxent Publishing and Homestead Publishing, publish 17 weekly newspapers throughout Anne Arundel, Baltimore, Carroll, Harford and
Howard counties. The largest of these weekly newspapers areThe Columbia Flier,The Towson Times, The Owings Mills
TimesandThe Aegis. The Baltimore Sun Company also operates a market leading website, baltimoresun.com.

TheOrlando Sentinelprimarily serves a six-county area in central Florida. It is the only major daily newspaper in the
Orlando market, although it competes with other Florida and national newspapers, as well as with other media. TheOrlando Sentinelhas been published
since 1876 and has won three Pulitzer Prizes. The Orlando market ranks 28th among U.S. markets in terms of households. Approximately 81% of the paper's daily and 73% of its Sunday circulation is sold
through home delivery, with the remainder primarily sold at newsstands and vending boxes.

Orlando
Sentinel Communications Company, publisher of theOrlando Sentinel, also publishesSentinel
ExpressandUS Express, free weekly publications used to distribute advertising and content to newspaper
non-subscribers. In addition to its newspaper website, orlandosentinel.com, the company operates metromix.com covering Central Florida. The company publishes the weekly,
Spanish-language newspaper,El Sentinel, and its companion website, elsentinel.com, as well as theDeltona Forum,
DeBary/OrangeCity ForumandDeLand Forumweekly community newspapers. The company's multimedia portfolio also includes several
free-distribution, niche products in the central Florida market includingJob Xtra, AutoFinderandNew
Homesmagazine. Orlando Sentinel Communications offers direct marketing/direct mail services and delivery services for other publications.

The Hartford Courant, founded in 1764, is the oldest continuously published newspaper in the United States. Published every morning, it is
the most widely circulated and read newspaper in Connecticut and the strongest medium in the state for advertisers and readers alike. Winner of two Pulitzer Prizes and twice named one of the five
best-designed newspapers in the world,The Hartford Courantis published in the state's capital, Hartford, and serves the state's northern
and central regions. Hartford Courant Company, publisher ofThe Hartford Courant, has one of the most extensive zoning operations in the country,
publishing eight editions ofThe Hartford Courantzoned for local news and advertising. The company also operates courant.com, Connecticut's leading
online news site, and ctnow.com, a statewide entertainment website. It also owns two subsidiaries: New Mass. Media, Inc., a publisher of four weekly alternative newspapers in Connecticut and
Massachusetts, and ValuMail, Inc., a shared-mail company that distributes advertising supplements to more than two million households in Connecticut, Massachusetts, New York
and Rhode Island.

Daily Pressis published daily, including Sunday, and serves the Virginia Peninsula market.Daily
Pressis the only major daily newspaper in its primary market, although it competes with other regional and national newspapers, as well as with other media. The Daily Pressmarket includes Newport News, Hampton, Williamsburg and eight other cities and counties. This market, together with Norfolk, Portsmouth and
Virginia Beach, is the 34th largest U.S. market in terms of households. The Daily Press, Inc., publisher ofDaily Press, also owns The Virginia Gazette, which is published twice weekly and primarily serves Williamsburg, Va. and surrounding counties. In addition, The Daily
Press, Inc. owns and operates dailypress.com, as well as 7cities.com, an entertainment website targeting young adults aged 18-34 years old.

The Morning Call, published since 1895, is the dominant regional newspaper for nine counties in eastern Pennsylvania and New Jersey. The
Morning Call, Inc., publisher ofThe Morning Call, offers free publications serving the recruitment and real estate markets, and selected high
income households. A free weekly newspaper and a targeted online venture serve the 18-34 year-old audience. Subsidiaries of The Morning Call, Inc. offer full
service direct marketing and saturation preprint delivery through non-subscriber distribution. In addition, the company owns and operates the premier regional website, mcall.com.
Allentown-Bethlehem-Easton is the 60th largest U.S. market in terms of households.

8

---



The AdvocateandGreenwich Timeprimarily serve the Stamford/Greenwich market in
southwestern Fairfield County, Conn.The Advocatehas won a Pulitzer Prize. The newspapers expanded operations in 2003 with an additional edition in
neighboring Norwalk.

Other Publishing Related Businesses

The Company also owns targeted publications, including three editions of the Spanish language newspaper,Hoy. Hoy, New York, a free publication as of January 2006, was introduced in 1998;Hoy, Chicago, is a
free publication introduced in September 2003; andHoy, Los Angeles, is a free publication introduced in March 2004. See Note 3 to
the Company's consolidated financial statements in Item 8 for a discussion of the charge recorded in 2004 related to the anticipated settlement with advertisers regarding misstated circulation
atHoy, New York. The Spanish language newspaper operates hoyinternet.com, a national Spanish language website. Hoyprovides news and features of interest
to Hispanics.Hoy, New York, serves the second largest
Hispanic market in the U.S.Hoy, Chicago, serves the interests of Chicago's 1.7 million Hispanics, the fourth largest Hispanic market in the U.S. Hoy,
Los Angeles, serves the largest Hispanic market in the U.S.

The
Company also owns Tribune Media Services, Inc. ("TMS"), which creates, aggregates and distributes news, information and entertainment content that reaches millions of users
through print, online and on-screen media. The TMS News and Features group licenses content from more than 600 writers, artists, newspaper and magazine publishers, and wire services to
roughly 4,000 media customers worldwide. The TMS Entertainment Products group creates TV and movie guide products for major media companies and consumers. TMS provides data for interactive program
guides to cable and satellite operators. The TMS TV Week Advertising Network represents newspaper TV magazines in 42 of the top 50 U.S. markets, covering 30 million Nielsen metered households
in the United States.

The
Company also operates CLTV, a regional 24-hour cable news channel serving Chicagoland. CLTV was launched in January 1993 and currently is available to more than
1.8 million cable households in the Chicago market.

Broadcasting and Entertainment

The broadcasting and entertainment segment represented 27% of the Company's consolidated operating revenues in 2005. At Dec. 25, 2005, the segment included
The WB Television Network ("The WB Network") affiliates located in New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas, Washington, D.C., Atlanta, Houston, Seattle, Miami, Denver,
St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans and Albany; the FOX Network television affiliates in Seattle, Sacramento, Indianapolis, Hartford, Grand Rapids and
Harrisburg; an ABC television affiliate in New Orleans; one radio station in Chicago; the Chicago Cubs baseball team; and Tribune Entertainment, a company that distributes its own programming together
with programming licensed from third parties. On Jan. 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its WB Network affiliates stations
with a new broadcast network, The CW Network, being launched in the fall of 2006. The WB Network will shut down at that time. Three of the Company's current WB Network affiliates (Philadelphia,
Atlanta and Seattle) will become independent stations at that time. When regulatory approval of the new network is received and the new affiliation agreements become effective, the Company will
write-off its WB affiliation agreement intangible assets for Philadelphia, Atlanta and Seattle. This write-off will most likely occur in the second or third quarter of 2006 and will total
approximately $15 million before taxes.

9

---



The
following table shows sources of operating revenues for the broadcasting and entertainment segment for the last three years (in thousands):

|                    |       | Fiscal Year Ended December
|------------------- | ----- | --------------------------
|
|Television(1)       |       | $                         
|Radio/entertainment |       |                           
|                    |       |                           
|                    | Total |                           
|                    |       |                           

---

10

---



Television

In 2005, television contributed 83% of the broadcasting and entertainment segment's operating revenues. The Company's television stations compete for audience and
advertising with other television and radio stations, cable television and other media serving the same markets. Competition for audience and advertising is based upon various interrelated factors
including programming content, audience acceptance and price.

Selected
data for the Company's television stations are shown in the following table:

|                      |  | Market(1) |  |     |  |     |  |        |  |     |  |  
|--------------------- |  | --------- |  | --- |  | --- |  | ------ |  | --- |  | -
|
|
|WPIXNew York, NY     |  | 1         |  | 6.7 |  | 6.7 |  | 11-VHF |  | WB  |  | 7
|KTLALos Angeles, CA  |  | 2         |  | 5.0 |  | 5.0 |  | 5-VHF  |  | WB  |  | 8
|WGNChicago, IL       |  | 3         |  | 3.1 |  | 3.1 |  | 9-VHF  |  | WB  |  | 8
|WPHLPhiladelphia, PA |  | 4         |  | 2.7 |  | 1.3 |  | 17-UHF |  | WB  |  | 7
|WLVIBoston, MA       |  | 5         |  | 2.2 |  | 1.1 |  | 56-UHF |  | WB  |  | 7
|KDAFDallas, TX       |  | 7         |  | 2.1 |  | 1.1 |  | 33-UHF |  | WB  |  | 9
|WBDCWashington, D.C. |  | 8         |  | 2.0 |  | 1.0 |  | 50-UHF |  | WB  |  | 7
|WATLAtlanta, GA      |  | 9         |  | 1.9 |  | 1.0 |  | 36-UHF |  | WB  |  | 8
|KHWBHouston, TX      |  | 10        |  | 1.8 |  | 0.9 |  | 39-UHF |  | WB  |  | 9
|KCPQSeattle, WA      |  | 13        |  | 1.5 |  | 1.5 |  | 13-VHF |  | FOX |  | 8
|KTWBSeattle, WA      |  | 13        |  |    |  |    |  | 22-UHF |  | WB  |  | 8
|WBZLMiami, FL        |  | 17        |  | 1.4 |  | 0.7 |  | 39-UHF |  | WB  |  | 7
|KWGNDenver, CO       |  | 18        |  | 1.3 |  | 1.3 |  | 2-VHF  |  | WB  |  | 7
|KTXLSacramento, CA   |  | 19        |  | 1.2 |  | 0.6 |  | 40-UHF |  | FOX |  | 7
|KPLRSt. Louis, MO    |  | 21        |  | 1.1 |  | 1.1 |  | 11-VHF |  | WB  |  | 6
|KWBPPortland, OR     |  | 23        |  | 1.0 |  | 0.5 |  | 32-UHF |  | WB  |  | 7
|WTTVIndianapolis, IN |  | 25        |  | 1.0 |  | 1.0 |  | 4-VHF  |  | WB  |  | 7
|WXINIndianapolis, IN |  | 25        |  |    |  |    |  | 59-UHF |  | FOX |  | 7
|KSWBSan Diego, CA    |  | 26        |  | 0.9 |  | 0.5 |  | 69-UHF |  | WB  |  | 7
|WTICHartford, CT     |  | 28        |  | 0.9 |  | 0.5 |  | 61-UHF |  | FOX |  | 7
|WTXXHartford, CT     |  | 28        |  |    |  |    |  | 20-UHF |  | WB  |  | 7
|WXMIGrand Rapids, MI |  | 39        |  | 0.7 |  | 0.3 |  | 17-UHF |  | FOX |  | 7
|WPMTHarrisburg, PA   |  | 41        |  | 0.6 |  | 0.3 |  | 43-UHF |  | FOX |  | 5
|WGNONew Orleans, LA  |  | 43        |  | 0.6 |  | 0.3 |  | 26-UHF |  | ABC |  | 7
|WNOLNew Orleans, LA  |  | 43        |  |    |  |    |  | 38-UHF |  | WB  |  | 7
|WEWBAlbany, NY       |  | 55        |  | 0.5 |  | 0.3 |  | 45-UHF |  | WB  |  | 7

---

11

---



Programming emphasis at the Company's stations is placed on network-provided shows, syndicated series, feature motion pictures, local and regional
sports coverage, news, and children's programs. These stations acquire most of their programming from outside sources, including The WB Network and the FOX Network, although a significant amount is
produced locally. WGN Cable ("WGN Superstation") programming is delivered by cable or satellite outside of the Chicago area and includes movies and first-run programming. Contracts for
purchased programming generally cover a period of one to five years, with payment also typically made over several years. The expense for amortization of television broadcast rights in 2005 was
$364 million, which represented approximately 29% of total television operating revenues.

12

---



Average
audience share information for the Company's television stations for the past three years is shown in the following table:

|                              |  |     |  | Average Audience Share(1) |    
|----------------------------- |  | --- |  | ------------------------- | ---
|
|
|WPIXNew York, NY             |  | WB  |  | 5.1                       | %  
|KTLALos Angeles, CA          |  | WB  |  | 4.0                       |    
|WGNChicago, IL               |  | WB  |  | 6.2                       |    
|WPHLPhiladelphia, PA         |  | WB  |  | 4.0                       |    
|WLVIBoston, MA               |  | WB  |  | 2.9                       |    
|KDAFDallas, TX               |  | WB  |  | 4.3                       |    
|WBDCWashington, D.C.         |  | WB  |  | 4.2                       |    
|WATLAtlanta, GA              |  | WB  |  | 3.7                       |    
|KHWBHouston, TX              |  | WB  |  | 4.8                       |    
|KCPQSeattle, WA              |  | FOX |  | 6.7                       |    
|KTWBSeattle, WA              |  | WB  |  | 2.5                       |    
|WBZLMiami, FL                |  | WB  |  | 5.2                       | (3)
|KWGNDenver, CO               |  | WB  |  | 3.9                       |    
|KTXLSacramento, CA           |  | FOX |  | 5.7                       |    
|KPLRSt. Louis, MO            |  | WB  |  | 5.0                       |    
|KWBPPortland, OR             |  | WB  |  | 3.7                       |    
|WTTVIndianapolis, IN         |  | WB  |  | 3.7                       |    
|WXINIndianapolis, IN         |  | FOX |  | 6.5                       |    
|KSWBSan Diego, CA            |  | WB  |  | 3.1                       |    
|WTICHartford, CT             |  | FOX |  | 6.3                       |    
|WTXXHartford, CT             |  | WB  |  | 2.1                       |    
|WXMIGrand Rapids, MI         |  | FOX |  | 7.1                       |    
|WPMTHarrisburg, PA           |  | FOX |  | 6.1                       |    
|WGNONew Orleans, LA          |  | ABC |  | 4.6                       | (3)
|WNOLNew Orleans, LA          |  | WB  |  | 3.8                       | (3)
|WEWBAlbany, NY               |  | WB  |  | 2.2                       |    
|26 Station Unweighted Average |  |     |  | 4.5                       |    

---

Average audience shares are shown on two bases: total market, which includes all channels, and in-market stations, which includes only
the major over-the-air stations. Average in-market shares are a more relevant benchmark to determine the stations' performance in their respective markets as they
compare the stations' performance to their primary programming and sales competition. In 2005, the average total market share and the average in-market share for the 26-station
group declined versus 2004. In several of the top 10 largest markets, the ratings decline was due in part to the rollout of Nielsen's Local People Meters ("LPMs"). LPMs have tended to reduce the
overall share of broadcast television as compared to cable television and, within the broadcast television universe, disadvantage stations like Tribune's that target younger audiences. The stations
were also affected by lower WB

13

---



Network
prime-time ratings and by some audience erosion due to a lack of major new syndicated programming.

Radio/Entertainment

In 2005, radio/entertainment operations contributed 17% of the broadcasting and entertainment segment's operating revenues. On March 21, 2003, the Company
transferred the remaining assets of the
Denver radio station group (KKHK-FM, now known as KQMT-FM), with an estimated fair market value of $55 million, plus $20 million in cash to ACME Communications in
exchange for the assets of KWBP-TV, Portland. WGN-AM, Chicago, is the only remaining radio station owned by the Company. Selected information for WGN-AM, Chicago,
is shown in the following table:

|                |  | Format                          |  | Frequency |  | National
Market
Rank(1) |  | Number of
Operating
Stations in
Market(2) |  | Audience
Share(3) |  
|--------------- |  | ------------------------------- |  | --------- |  | ----------------------- |  | ----------------------------------------- |  | ----------------- | -
|WGN-AM, Chicago |  | Personality/Infotainment/Sports |  | 720-AM    |  | 3                       |  | 42                                        |  | 5.7               | %

---

Entertainment includes Tribune Entertainment Company ("Tribune Entertainment") and the Chicago Cubs baseball team. The Chicago Cubs were acquired
in 1981. Cubs games are broadcast on WGN-TV and WGN-AM. Tribune Entertainment is a leading distributor of programming in the United States syndicated television, cable
television and ancillary markets. Tribune Entertainment distributes its own programming together with programming licensed from third parties.

In
2005, Tribune Entertainment entered into a variety of distribution, production, and advertiser sales relationships with major suppliers such as DreamWorks SKG for the exclusive
domestic syndication and ad sales of their film library, FremantleMedia, Hearst Entertainment, MGM Television, Carlton America, Sony Television and NBC/Universal Television. These arrangements
comprise over 384 television and theatrical motion pictures and more than 1,289 episodes of various television series and specials including "South Park," "Family Feud," "Soul Train," "Ron Hazelton's
House Calls," "Pet Keeping with Marc Morrone," and "Fine Living: Homes and Hideaways." In 2005, Tribune Entertainment also distributed its television series productions of "Andromeda," "Earth Final
Conflict," "Beastmaster," "Mutant X," and "US Farm Report."

In
the fall of 2006, the first of the DreamWorks SKG titles become available. In addition, Tribune Entertainment acquired the exclusive domestic broadcast syndication rights to the
"American Idol" series. The weekly one-hour series, titled "American Idol Rewind," will include original, never-before-seen episodes.

Tribune
Studios, a subsidiary of Tribune Entertainment, manages a 10.5-acre studio production lot in Hollywood. Management of the site includes facilities rental of nine
state-of-the art digital sound stages and associated production office space.

Investments

The Company has investments in several public and private companies. See Note 7 to the Company's consolidated financial statements in Item 8 for
further discussion of the Company's cost and equity method investments.

The
Company's principal equity method investments currently include The WB Network, CareerBuilder, Classified Ventures, TV Food Network, Comcast Sports Network, ShopLocal (formerly

14

---



CrossMedia
Services), Topix.net, TMCT I and TMCT II. The WB Network provides the Company's WB affiliate television stations with original prime-time and children's
programming. On Jan. 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its television stations with The CW Network, being launched in the
fall of 2006. The WB Network will shut down at that time. Three of the Company's current WB Network affiliates (Philadelphia, Atlanta and Seattle) will become independent stations at that time.
CareerBuilder, an online recruiting company formed in 2000, is owned equally by the Company, Knight-Ridder, Inc. and Gannett Co., Inc. Classified Ventures is a network of automotive and
real estate classified advertising websites. TV Food Network is a 24-hour cable/satellite television network focusing on food and entertaining. Comcast Sports Network is a
24-hour cable/satellite television network formed in 2003, which began programming in the fall of 2004, focusing on Chicago sports teams. ShopLocal was jointly acquired in May 2004
with Gannett Co., Inc. and Knight-Ridder, Inc. ShopLocal transforms traditionally print-based retail promotions into search-based interactive formats. Each partner owns a
one-third interest in ShopLocal. Topix.net is an online news and information aggregation website that continuously monitors breaking news from over 10,000 online sources and categorizes
daily news content into over 300,000 topics, 24 hours a day. The Company's investments in TMCT I and TMCT II are further discussed in Note 6 to the Company's consolidated
financial statements in Item 8.

Non-Operating Items

The Company reported several non-operating items in 2005, 2004 and 2003, which included gains and losses resulting from sales of subsidiaries and
investments, changes in the fair values of the Company's PHONES derivatives and related investment, the early retirement of debt, settlement of insurance claims related to Sept. 11, 2001,
write-downs of investments, and income tax adjustments, including additional tax expense associated with the Matthew Bender and Mosby tax liability. These non-operating items are further
discussed in Note 2 to the Company's consolidated financial statements in Item 8.

Governmental Regulation

Various aspects of the Company's operations are subject to regulation by governmental authorities in the United States.

The
Company's television and radio broadcasting operations are subject to FCC jurisdiction under the Communications Act of 1934, as amended. FCC rules, among other things, govern the
term, renewal and transfer of radio and television broadcasting licenses, and limit concentrations of broadcasting control inconsistent with the public interest. Federal law also regulates the rates
charged for political advertising and the quantity of advertising within children's programs. The Company is permitted to own both newspaper and broadcast operations in the Chicago market by virtue of
"grandfather" provisions in the FCC regulations and in the Fort Lauderdale/Miami market by virtue of a temporary waiver of the television/newspaper cross-ownership rule.

Because
the Times Mirror acquisition in 2000 did not involve the transfer of any broadcast station licenses, FCC approval was not required to complete the transaction. Under the
television/newspaper cross-ownership rule in effect at the time of the merger, companies were generally prohibited from owning both a newspaper and a broadcast license in the same market. However, it
was also the FCC's policy to permit newly created television/newspaper combinations to be held until the next broadcast license renewal. As such, license renewals for three Tribune television
propertiesKTLA-TV, Los Angeles (renewal in 2006), WPIX-TV, New York (renewal in 2007) and WTIC-TV, Hartford (renewal in 2007)would be
affected by the Times Mirror acquisition under the old FCC media ownership rules. On June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper
cross-ownership rule. The new rule would eliminate the cross-ownership prohibition entirely in markets with nine or more television stations. Under this rule, the Company would be permitted to retain
its

15

---



newspaper
and television operations in each of the five markets where it owns both newspaper and television operationsNew York, Los Angeles, Chicago, South Florida, and Hartford.

In
September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy
groups challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for further proceedings while keeping the stay in effect. As a result, the FCC will undertake
a new rulemaking proceeding to address the issues raised by the Third Circuit. It is unlikely the new proceeding will be concluded before KTLA-TV's license expires in December 2006
and the Company will seek and expects to receive a waiver to allow continued ownership of both theLos Angeles Timesand KTLA-TV pending the
outcome of the FCC proceeding. The Company has a temporary waiver, pending the outcome of the same rulemaking proceeding, in connection with its 1997 acquisition of WBZL-TV, Miami, which
is considered part of the market served by theSouth Florida Sun-Sentinel, published in Fort Lauderdale. The renewal application for
WBZL-TV is currently pending before the FCC. Depending on the timing and outcome of the FCC proceedings on the cross-ownership rule, the Company may require waivers to allow continued
ownership of its newspapers while it holds broadcast licenses in the New York and Hartford markets.

Congress
removed national limits on the number of broadcast stations a licensee may own in 1996. However, federal law continues to limit the number of radio and television stations a
single owner may
own in a local market, and caps the percentage of the national television audience that may be reached by a licensee's television stations in the aggregate at 39%. The local ownership rules allow,
under certain conditions, common ownership of two television stations and certain radio/television combinations. In 2001, the Company acquired television station WTXX-TV, Hartford,
pursuant to a so-called "failing station" waiver allowing common ownership of WTIC-TV and WTXX-TV in the same market.

Television
and radio broadcasting licenses are subject to renewal by the FCC, at which time they may be subject to petitions to deny the license renewal applications. At Dec. 25,
2005, the Company had FCC authorization to operate 26 television stations and one AM radio station. At Dec. 25, 2005, the Company had twelve television license renewal applications pending
before the FCC (WBDC-TV, Washington, D.C., WBZL-TV, Miami, WATL-TV, Atlanta, WGNO-TV and WNOL-TV, New Orleans, WXIN-TV,
WTTV-TV and WTTK-TV, Indianapolis (which rebroadcasts the signal of WTTV-TV in its entirety and has a separate license renewal application pending),
WXMI-TV, Grand Rapids, WGN-TV, Chicago, KPLR-TV, St. Louis, and KWGN-TV, Denver).

The
FCC has approved technical standards and channel assignments for digital television ("DTV") service. DTV permits broadcasters to transmit video images with higher resolution than
existing analog signals. Operators of full-power television stations have each been assigned a second channel for DTV while they continue analog broadcasts on the original channel. After
the transition is complete, broadcasters will be required to return one of the two channels to the FCC and transmit exclusively in digital format. By law, the transition to DTV is to occur by
Dec. 31, 2006, subject to extension if 80% or more of U.S. households do not have a DTV receiver, a benchmark that is not expected to be met. In December 2005, the Senate passed a bill
that would, among other things, extend the digital transition deadline to Feb. 17, 2009. Conversion to digital transmission is requiring all television broadcasters, including those owned by
the Company, to invest in digital equipment and facilities. At Dec. 25, 2005, all of the Company's television stations were DTV compliant.

The
FCC has not yet issued final DTV channel assignments for operation after the transition from analog has ended, and has not resolved a number of issues relating to the operation of
DTV stations. These issues include the obligations of DTV stations to broadcast children's programming as well as additional "public interest" obligations that may be imposed on broadcasters' use of
digital spectrum.

16

---



From
time to time, the FCC revises existing regulations and policies in ways that could affect the Company's broadcasting operations. In addition, Congress from time to time considers
and adopts substantive amendments to the governing communications legislation. The Company cannot predict
what regulations or legislation may be proposed or finally enacted or what effect, if any, such regulations or legislation could have on the Company's broadcasting operations.

Employees

The average number of full-time equivalent employees of the Company in 2005 was 22,400, approximately 800 less than the average for 2004, primarily
due to the elimination of approximately 900 positions in 2005, primarily in the publishing segment.

During
2005, the Company's publishing segment employed approximately 18,800 full-time equivalent employees, about 16% of whom were represented by unions covered under 19
labor contracts. Contracts with unionized employees of the publishing segment expire at various times through December 2007.

The
broadcasting and entertainment segment had an average of 3,370 full-time equivalent employees in 2005. Approximately 23% of these employees were represented by unions
covered under 21 labor contracts. Contracts with unionized employees of the broadcasting and entertainment segment expire at various times through July 2007.

Executive Officers of the Company

Information with respect to the executive officers of the Company as of Feb. 17, 2006, is set forth below. Their ages are indicated in parentheses. The
descriptions of the business experience of these individuals include the principal positions held by them since February 2001. Unless otherwise indicated, all references to positions are to
officers of the Company.

Dennis
J. FitzSimons (55)
Chairman (since January 2004), Chief Executive Officer (since January 2003) and President (since July 2001); Chief Operating Officer from July 2001 until
December 2002; Executive Vice President from January 2000 until July 2001; President of Tribune Broadcasting Company* until January 2003.

Donald
C. Grenesko (57)
Senior Vice President/Finance and Administration.

Crane
H. Kenney (43)
Senior Vice President, General Counsel and Secretary.

Timothy
J. Landon (43)
President of Tribune Interactive, Inc.* since March 2004; President of Tribune Classified* from June 2000 until March 2004.

Thomas
D. Leach (45)
Senior Vice President/Development since February 2005; Vice President/Development from February 2004 until February 2005; Vice President and Chief Financial Officer of Tribune
Broadcasting Company* from March 2001 until January 2004; Vice President/Development until February 2001.

Luis
E. Lewin (57)
Senior Vice President/Human Resources.

R.
Mark Mallory (55)
Vice President and Controller.

17

---



Ruthellyn
Musil (54)
Senior Vice President/Corporate Relations since February 2004; Vice President/Corporate Relations until February 2004.

John
E. Reardon (52)
President of Tribune Broadcasting Company* since November 2005; Vice President of Tribune Broadcasting Company* from March 2004 until November 2005; Vice President and General
Manager of KTLA-TV, Los Angeles* until March 2004.

Scott
C. Smith (55)
President of Tribune Publishing Company* since January 2005; Chief Operating Officer of Tribune Publishing Company* from November 2004 until January 2005; President of Chicago
Tribune Company* until November 2004.

---

Available Information

The Company maintains an Internet website at www.tribune.com where the Company's Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable following the time that
they are filed with or furnished to the Securities and Exchange Commission.

18

---





ITEM 1A. RISK FACTORS.

The foregoing business discussion and the other information included in this Form 10-K should be read in conjunction with the following risks,
trends and uncertainties, any of which, either individually or in the aggregate, could materially and adversely affect our business, operating results or financial condition.

Advertising demand will continue to be impacted by changes in economic conditions and fragmentation of the media landscape

Advertising revenue is the primary source of revenue for our publishing and broadcasting businesses. National and local economic conditions, particularly in major
metropolitan markets, affect the levels of retail, national and classified newspaper advertising revenue, as well as television advertising revenue. Changes in Gross Domestic Product, consumer
spending, auto sales, housing sales, unemployment rates, job creation and circulation levels and rates all impact demand for advertising. Consolidation across various industries, particularly large
department store and telecommunications companies, may also reduce our overall advertising revenue.

Competition
from other media, including other metropolitan, suburban and national newspapers, broadcasters, cable systems and networks, satellite television and radio, websites,
magazines, direct marketing and solo and shared mail programs, affects our ability to retain advertising clients and raise rates. In recent years, Internet sites devoted to recruitment, automobile and
real estate have become significant competitors of our newspapers and websites for classified advertising. While we have invested in successful Internet ventures such as CareerBuilder and Classified
Ventures to capture some of the advertising dollars that have migrated online, retaining our historical share of classified advertising revenues remains a challenge.

Seasonal
variations in consumer spending cause our quarterly advertising revenues to fluctuate. Second and fourth quarter advertising revenues are typically higher than first and third
quarter advertising revenues, reflecting the slower economic activity in the winter and summer and the stronger fourth quarter holiday season.

In
broadcasting, the proliferation of cable and satellite channels, advances in mobile and wireless technology, the migration of television audiences to the Internet and the viewing
public's increased control over the manner and timing of their media consumption through personal video recording devices, have resulted in greater fragmentation of the television viewing audience and
a more difficult sales environment.

Circulation and audience share may decline as consumers migrate to other media alternatives

Competition for newspaper advertising is based on reader demographics, price, service, advertiser results, and circulation and readership levels, while
competition for circulation is based upon the content of the newspaper, service and price. Competition for television advertising is based on audience share and ratings information, audience
demographics and price.

The
National Do Not Call Registry has impacted the way newspapers sell home-delivery circulation, particularly for the larger newspapers which historically have relied on
telemarketing. Similarly, Nielsen's Local People Meters, which capture viewership data in a different manner than historical Nielsen viewership data collection methods, have tended to reduce the
overall share of broadcast television compared to cable television and, within the broadcast television universe, disadvantage stations like ours that target younger audiences.

Both
advertising and circulation revenues are being affected by consumer trends, including declining newspaper buying by young people and the migration to other available forms of media
for news. In order to address declining circulation in certain markets, we may increase marketing designed

19

---



to
retain our existing subscriber base and continue to introduce niche publications targeted at commuters and young adults. We may also increase marketing efforts to drive traffic to our proprietary
websites.

Changes in the regulatory landscape could affect our business operations and asset mix

Various aspects of our operations are subject to regulation by governmental authorities in the United States. Changes in the current regulatory environment could
result in increased operating costs or divestitures of several of our properties.

Our
television and radio broadcasting operations are subject to FCC jurisdiction under the Communications Act of 1934, as amended. FCC rules, among other things, govern the term, renewal
and transfer of radio and television broadcasting licenses and limit concentrations of broadcasting control inconsistent with the public interest. Federal law also regulates the rates charged for both
political advertising and the quantity of advertising within children's programs.

From
time to time, the FCC revises existing regulations and policies in ways that could affect our broadcasting operations. In addition, Congress from time to time considers and adopts
substantive amendments to governing communications legislation. We cannot predict what regulations or legislation may be proposed or finally enacted or what effect, if any, such regulations or
legislation could have on our broadcasting operations. See "Item 1. BusinessGovernmental Regulation" for a discussion of the pending FCC review of the television/newspaper
cross-ownership rule and the effect the outcome could have on our business.

The availability and cost of quality syndicated programming may impact television ratings

The cost of syndicated programming represents a significant portion of television operating expenses. Programming emphasis at our stations is placed on
network-provided programming, syndicated series, feature motion pictures, local and regional sports coverage, news, and children's programs. Most of our stations' programming is acquired from outside
sources, including the networks with which our stations are affiliated, and some is produced locally or supplied by Tribune Entertainment Company. Syndicated programming costs are impacted largely by
market factors, including demand from other stations or cable channels within the market. Availability of syndicated programming depends on the production of compelling programming and the willingness
of studios to offer the programming to unaffiliated buyers. Our inability to continue to acquire or produce affordable programming for our stations could adversely affect operating results or our
financial condition.

Events beyond our control may result in unexpected adverse operating results

Our results could be affected in various ways by global or domestic events beyond our control, such as wars, political unrest, acts of terrorism, and natural
disasters. Such events can quickly result in significant declines in advertising revenues and significant increases in newsgathering costs. Coverage of the war in Iraq and Hurricane Katrina are two
examples where newsgathering costs increased and, in the case of Hurricane Katrina, revenues dropped off significantly at our two New Orleans television stations.

Newsprint prices may continue to be volatile and difficult to predict and control

Newsprint is one of the largest expenses of our publishing units. The price of newsprint has historically been volatile and the consolidation of North American
newsprint mills over the years has reduced the number of suppliers. We have historically been able to realize favorable newsprint pricing by virtue of our company-wide volume and a
long-term contract with a significant supplier. Failure to maintain our current consumption levels, further supplier consolidation or the inability to maintain our existing relationships
with our newsprint suppliers could adversely impact newsprint prices in the future.

20

---



Changes in our credit ratings may affect our borrowing costs

Tribune currently has investment-grade credit ratings for its commercial paper and long-term debt. These investment-grade credit ratings afford us
lower borrowing rates in both the commercial paper markets and in connection with senior debt offerings. In order to maintain this investment-grade rating, the credit rating agencies require us to
meet certain financial performance ratios. Increased debt levels and/or decreased earnings could result in downgrades in our credit ratings, which, in turn, could reduce the total amount of commercial
paper we could issue, raise our commercial paper borrowing costs and/or raise our long-term debt borrowing rates.

Changes in accounting standards can significantly impact reported earnings and operating results

Generally accepted accounting principles and accompanying pronouncements and implementation guidelines for many aspects of our business, including those related
to intangible assets, pensions, income taxes, derivatives, share-based compensation, and broadcast rights, are complex and involve significant judgments. Changes in these rules or their interpretation
could significantly change our reported earnings and operating results. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCritical
Accounting Policies and Estimates" and Note 1 in "Item 8. Financial Statements and Supplementary Data."

Adverse results from litigation or governmental investigations can impact our business practices and operating results

From time to time, Tribune and its subsidiaries are parties to litigation and regulatory, environmental and other proceedings with governmental authorities and
administrative agencies. Adverse outcomes in lawsuits or investigations could result in significant monetary damages or injunctive relief that could adversely affect our operating results or financial
condition as well as our ability to conduct our businesses as they are presently being conducted.

We could be faced with additional tax liabilities

We are subject to both federal and state income taxes and are regularly audited by federal and state taxing authorities. Significant judgment is required in
evaluating our tax positions and in establishing appropriate reserves. We analyze our tax positions and reserves on an ongoing basis and make adjustments when warranted based on changes in facts and
circumstances. While we believe our tax positions and reserves are reasonable, the resolution of our tax issues are unpredictable and could negatively impact our effective tax rate, net income or cash
flows for the period or periods in question.

Labor strikes, lock-outs and protracted negotiations can lead to business interruptions and increased operating costs

Union employees comprise about 20% of our workforce. We are required to negotiate collective bargaining agreements across our business units on an ongoing basis.
Complications in labor negotiations can lead to work slowdowns or other business interruptions and greater overall employee costs.

Acquisitions, investments and divestitures pose inherent financial and other risks and challenges

We continuously evaluate our businesses and make strategic acquisitions and investments, either individually or with partners, and divestitures as part of our
strategic plan. These transactions involve challenges and risks in negotiation, execution, valuation and integration. Moreover, competition for certain types of acquisitions is significant,
particularly in the Interactive space. Even if successfully negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy and may fall short of
expected return on investment targets. In certain of our investments, we take a minority position in a company with limited voting rights and an inability to exert absolute control over the entity.

21

---



ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

The corporate headquarters of the Company are located at 435 North Michigan Avenue, Chicago, Illinois. The general character, location and approximate size of the
principal physical properties used by the Company on Dec. 25, 2005, are listed below. In total, the Company owns or leases transmitter sites, parking lots and other land aggregating
approximately 1,100 acres in 97 separate locations. In addition to those properties listed below, the Company owns or leases an aggregate of approximately 3,015,000 square feet of office and
production space in 311 locations. The Company also owns Wrigley Field, the 39,620-seat stadium used by the Chicago Cubs baseball team. The Company considers its various properties to be
in good condition and suitable for the purposes for which they are used.

|                                |                                                                                  | Approximate Area
in Square Feet
|------------------------------- | -------------------------------------------------------------------------------- | -------------------------------
|
|
|Publishing:                     |                                                                                  |                                
|                                | Printing plants, business and editorial offices, and warehouse
space located in: |                                
|                                |                                                                                  | Los Angeles, CA                
|                                |                                                                                  | Chicago, IL                    
|                                |                                                                                  | Melville, NY                   
|                                |                                                                                  | Baltimore, MD                  
|                                |                                                                                  | Hartford, CT                   
|                                |                                                                                  | Orlando, FL                    
|                                |                                                                                  | Deerfield Beach, FL            
|                                |                                                                                  | Costa Mesa, CA                 
|                                |                                                                                  | Irwindale, CA                  
|                                |                                                                                  | Allentown, PA                  
|                                |                                                                                  | Chatsworth, CA                 
|                                |                                                                                  | Newport News, VA               
|                                |                                                                                  | Northlake, IL                  
|                                |                                                                                  | Fort Lauderdale, FL            
|                                |                                                                                  | Oakbrook, IL                   
|                                |                                                                                  | Stamford, CT                   
|                                |                                                                                  | Miller Place, NY               
|                                |                                                                                  | Glens Falls, NY                
|                                |                                                                                  | Bel Air, MD                    
|                                |                                                                                  | Columbia, MD                   
|                                |                                                                                  | Williamsburg, VA               
|                                |                                                                                  | Greenwich, CT                  
|Broadcasting and entertainment: |                                                                                  |                                
|                                | Business offices, studios and transmitters located in:                           |                                
|                                |                                                                                  | Los Angeles, CA                
|                                |                                                                                  | Chicago, IL                    
|                                |                                                                                  | New York, NY                   
|                                |                                                                                  | Indianapolis, IN               
|                                |                                                                                  | Seattle, WA                    
|                                |                                                                                  | Greenwood Village, CO          
|                                |                                                                                  | Maryland Heights, MO           
|                                |                                                                                  |                                

22

---



| |  | Atlanta, GA      |  | 36,000 |  |      
| |  | ---------------- |  | ------ |  | ------
| |  | Houston, TX      |  | 35,000 |  |      
| |  | Dallas, TX       |  | 33,000 |  |      
| |  | San Diego, CA    |  |       |  | 26,000
| |  | Hartford, CT     |  |       |  | 22,000
| |  | Boston, MA       |  | 47,000 |  |      
| |  | Philadelphia, PA |  | 21,000 |  | 4,000 
| |  | Sacramento, CA   |  | 24,000 |  |      
| |  | Grand Rapids, MI |  | 21,000 |  |      
| |  | Hollywood, FL    |  | 20,000 |  |      
| |  | York, PA         |  | 20,000 |  |      
| |  | Beaverton, OR    |  | 14,000 |  |      
| |  | Washington, DC   |  |       |  | 13,000

---

ITEM 3. LEGAL PROCEEDINGS.

The Company and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. In addition, the Company and
its subsidiaries are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.

In
February 2004, a purported class action lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayand Hoy, New York, alleging that
they were overcharged for advertising as a result of inflated circulation numbers at these two publications. The purported
class action also alleges that entities that paid aNewsdaysubsidiary to deliver advertising flyers were overcharged. In July 2004, another
lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayalleging damages resulting from inflated Newsdaycirculation numbers as well
as federal and state antitrust violations. The Company intends to vigorously defend these suits.

On
June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for bothNewsdayand Hoy, New York for the 12-month period
ending Sept. 30, 2003 and the six-month period ending March 31, 2004. The
circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New
York, conducted by the Company's internal audit staff and the Audit Bureau of Circulations ("ABC"). Subsequent to the June 17th disclosure, the Company continued its internal
review and found additional misstatements for these time periods, as well as misstatements that impacted the 12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the
Company announced additional revisions to the circulation figures forNewsdayandHoy, New York, for the
12-month period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. In November 2004, ABC released its audit reports for NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003. In
March 2005, ABC released its audit reports forNewsdayfor the six-month periods ending

23

---



March 31,
2004 and Sept. 30, 2004. In May 2005, ABC released its audit reports forHoy, New York, for the six-month
periods ending March 31, 2004 and Sept. 30, 2004. Audited circulation figures for bothNewsdayand Hoy, New York, for these periods were within
the ranges previously disclosed. After releasing these reports, ABC recalled Newsday'saudit report and Publisher's Statements covering the 12-month period ending Sept. 30, 2002 and all of
Hoy, New York's audit reports and Publisher's Statements covering the periods ending March 31, 2000 through Sept. 30, 2002, stating that,
due to insufficient information, they could not verify circulation for those periods. ABC also withdrew its unqualified opinion as to the material fairness of the circulation reported for Newsdayfor
the 12-month periods ending Sept. 30, 2000 and Sept. 30, 2001, again citing insufficient information necessary to
confirm the unqualified opinions. ABC's circulation audit atNewsdayfor the six-month period ending March 31, 2005 was issued in
October 2005 with no significant adjustments. ABC's circulation audit atHoy, New York, for the six-month period ending
March 31, 2005 was issued in January 2006 with no significant adjustments. Circulation audits atNewsdayand Hoy, New York, for the period ending
September 2005 are ongoing.Hoy, New York, converted to free
distribution in January 2006. Due to this change,Hoy, New York's circulation for the period ended September 2005 and going forward will
be audited by the Certified Audit of Circulations.

As
a result of misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable cost to settle with advertisers based upon facts available at July 30, 2004,
the date of the Company's second quarter 2004 Form 10-Q filing. Subsequent to that date, the Company found additional circulation misstatements, which increased the cost to settle
with advertisers. As a result, the Company recorded an additional pretax charge of $55 million in the third quarter of 2004 to increase the estimate of the probable cost to settle with NewsdayandHoy, New York, advertisers to a total of $90 million. The Company will continue to
evaluate the adequacy of this charge on an ongoing basis (see Note 3 to the Company's consolidated financial statements in Item 8).

In
addition to the advertiser lawsuits, several class action and shareholder derivative suits have been filed against the Company and certain of its current and former directors and
officers as a result of the
circulation misstatements atNewsdayandHoy, New York. The suits, which are currently pending in
Illinois Federal and State Courts, allege breaches of fiduciary duties and other managerial and director failings under Delaware law, the federal securities laws and ERISA. The Company believes the
complaints are without merit and intends to vigorously defend the suits.

The
Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into the
circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. The Company cannot predict with certainty the outcome of these inquiries.

In
March 1997, the Company acquired Renaissance Communications Corp., a publicly traded company that owned six television stations, for $1.1 billion in cash. The stations
acquired were KDAF-TV, Dallas, WBZL-TV, Miami, KTXL-TV, Sacramento, WXIN-TV, Indianapolis, WTIC-TV, Hartford, and WPMT-TV,
Harrisburg. The FCC granted a 12-month waiver of its rule prohibiting television/newspaper cross-ownership in the same market, which relates to the WBZL-TV, Miami television
station and theSouth Florida Sun-Sentinelnewspaper. In March 1998, the FCC granted the Company a waiver extension to allow
continued ownership of both WBZL-TV, Miami, and theSouth Florida Sun-Sentinelnewspaper until the FCC concludes its review of
the television/newspaper cross-ownership rule. As discussed below, the new television/newspaper cross-ownership rule adopted by the FCC in June 2003 permits Tribune to own the newspapers and
broadcast licenses in all of its current cross-owned markets, including South Florida. However, also as discussed below, the new television/newspaper cross-ownership rule has been remanded to the FCC
for further proceedings. Depending on the outcome of the FCC proceedings, the Company may require a waiver to allow continued ownership of both WBZL-TV, Miami, and the South Florida Sun-Sentinel.

24

---



In
March 2000, as a result of the Times Mirror merger, the Company acquired theLos Angeles Times, Newsday,The Baltimore
Sun,The Hartford Courant, The Morning Call,The Advocate,Greenwich Timeand
several smaller newspapers. Because the Times Mirror acquisition did not involve the transfer of any broadcast station licenses, approval of the FCC was not required to complete the transaction. Under
the FCC's television/newspaper cross-ownership rule in effect at the time of the merger, companies were generally prohibited from owning both a newspaper and a broadcast license in the same market.
However, it was also the FCC's policy to permit newly created television/newspaper combinations to be held until the next broadcast license renewal. As such, license renewals for three Tribune
television propertiesKTLA-TV, Los Angeles (renewal in 2006), WPIX-TV, New York (renewal in 2007) and WTIC-TV, Hartford (renewal in 2007), would be
affected by the Times Mirror acquisition under the old FCC media ownership rules. It is unlikely that the new proceeding will be concluded before these licenses expire, and the Company will seek and
expects to receive waivers to allow continued ownership of both newspapers and broadcast licenses in the Los Angeles, New York and Hartford markets.

In
2001, the Company received FCC authorization to operate television station WTXX-TV, Hartford. The FCC granted a so-called "failing station" waiver to allow
common ownership of WTIC-TV, Hartford, and WTXX-TV, Hartford. In addition, the FCC granted a temporary six-month waiver of the newspaper-broadcast ownership
prohibition. The temporary waiver has been extended until the FCC has completed its review of the renewal application for WTXX-TV. Should there be no timely relief forthcoming from the
FCC's proceeding, the Company will seek and expects to receive a waiver to allow continued ownership of both WTIC-TV, Hartford, and WTXX-TV, Hartford, and The Hartford Courant.

On
June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper cross-ownership rule. The new rule would eliminate the cross-ownership prohibition
entirely in markets with nine or more television stations and permit combinations of one newspaper and one television station in markets having from four to eight television stations. Under this rule,
the Company would be permitted to retain its newspaper and television operations in each of the five markets where it owns bothNew York, Los Angeles, Chicago, South Florida, and Hartford.
In September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy groups
challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for further proceedings while keeping the stay in effect. On Jan. 28, 2005, the Company and
other media companies filed a joint petition seeking United States Supreme Court review of the June 2004 Third Circuit remand. On June 13, 2005, the Supreme Court declined to review the
petition, without addressing the Constitutional arguments raised and without foreclosing additional appeals if the Company's interests are not adequately addressed as part of the FCC's remand
proceeding. While the Company remains optimistic that the cross-ownership ban will ultimately be loosened in major markets, it cannot predict with certainty the timing or the outcome of the FCC's
remand proceeding.

During
1998, Times Mirror, which was acquired by the Company in 2000, disposed of its Matthew Bender and Mosby subsidiaries in separate transactions, which were structured to qualify as
tax-free reorganizations under the Internal Revenue Code. The Company believes these transactions were completed on a tax-free basis. However, the Internal Revenue Service
("IRS") audited the transactions and disagreed with the position taken by Times Mirror. In the fourth quarter of 2001, the Company received an IRS adjustment to increase Times Mirror's 1998 taxable
income by approximately $1.6 billion. The Company filed a petition in United States Tax Court in November 2002 to contest the IRS position, and in December 2004, the Company
presented its position in United States Tax Court.

On
Sept. 27, 2005, the United States Tax Court issued an opinion contrary to the Company's position and determined that the Matthew Bender transaction was a taxable sale. In
January 2006, the Tax Court extended its opinion in the Matthew Bender case to the Mosby transaction given the

25

---



similarity
of the two transactions. Taxes and related interest for both the Matthew Bender and Mosby transactions total approximately $1 billion. Over time, deductions for state taxes and
interest are expected to reduce the net cash outlay to approximately $840 million.

The
Company will appeal the Tax Court ruling to the United States Court of Appeals for the Seventh Circuit. The Company does not expect a ruling before the first half of 2007. The
Company cannot predict with certainty the outcome of this appeal.

Times
Mirror established a tax reserve of $180 million in 1998 when it entered into the transactions. The reserve represented Times Mirror's best estimate of the amount the
expected IRS and state income tax claims could be settled for based upon an analysis of the facts and circumstances surrounding the issue. The Company maintained this initial reserve, plus interest,
and evaluated the adequacy of the reserve on a periodic basis. As a result of the Tax Court ruling, the Company increased its tax reserve by an additional $609 million in the third quarter of
2005 by recording additional income tax expense of $150 million, representing additional after-tax interest applicable to the post-acquisition period, and goodwill of
$459 million. On Sept. 30, 2005, the Company paid $880 million to the IRS, representing the federal tax and interest owed on the transactions, and financed the payment through the
issuance of commercial paper. The Company expects to make related state tax and interest payments of approximately $125 million during 2006. See Note 12 to the Company's consolidated
financial statements in Item 8.

The
Company does not believe that any other matters or proceedings presently pending will have a material adverse effect on its consolidated financial position, results of operations or
liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

26

---





PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company's common stock is presently listed on the New York, Chicago and Pacific stock exchanges. The high and low sales prices of the common stock by fiscal
quarter for the two most recent fiscal years, as reported on the New York Stock Exchange Composite Transactions list, were as follows:

|       |  | 2005 |       | 2004
|------ |  | ---- | ----- | ----
|
|
|First  |  | $    | 42.37 |     
|Second |  |      | 40.14 |     
|Third  |  |      | 39.56 |     
|Fourth |  |      | 36.15 |     

At Feb. 17, 2006, there were 6,461 holders of record of the Company's common stock. Quarterly cash dividends declared on common stock were $.18 per share
for each quarter during 2005 and $.12 per share for each quarter during 2004. Total cash dividends declared on common stock by the Company were $225 million for 2005 and $155 million for
2004. The Company announced in February 2006 that its quarterly cash dividends would be $.18 per share in 2006.

In
2000, the Company's Board of Directors authorized the Company to repurchase $2.5 billion of its common stock. Through Dec. 25, 2005, the Company repurchased
56 million shares of its common stock at a cost of $2.3 billion under this authorization. In December 2005, the Board of Directors authorized additional repurchases of
$1 billion (inclusive of $160 million of remaining authority under the 2000 stock repurchase authorization). Repurchases, by fiscal period, for 2005 were as follows (in thousands, except
average price):

|                                        |  | Shares
Repurchased |  | Average
Price |       | Total Number of
Shares Repurchased |        | Value of Shares
that May Yet be
Repurchased
|--------------------------------------- |  | ------------------ |  | ------------- | ----- | ---------------------------------- | ------ | -------------------------------------------
|Period 1 (5 weeks ended Jan. 30, 2005)  |  |                   |  | $             |      |                                    | 44,245 |                                            
|Period 2 (4 weeks ended Feb. 27, 2005)  |  | 100                |  |               | 41.69 |                                    | 44,345 |                                            
|Period 3 (4 weeks ended March 27, 2005) |  |                   |  |               |      |                                    | 44,345 |                                            
|Period 4 (4 weeks ended April 24, 2005) |  | 591                |  |               | 38.15 |                                    | 44,936 |                                            
|Period 5 (4 weeks ended May 22, 2005)   |  | 2,072              |  |               | 38.00 |                                    | 47,008 |                                            
|Period 6 (5 weeks ended June 26, 2005)  |  | 2,660              |  |               | 36.02 |                                    | 49,668 |                                            
|Period 7 (5 weeks ended July 31, 2005)  |  | 935                |  |               | 35.75 |                                    | 50,603 |                                            
|Period 8 (4 weeks ended Aug. 28, 2005)  |  | 317                |  |               | 37.64 |                                    | 50,920 |                                            
|Period 9 (4 weeks ended Sept. 25, 2005) |  | 2,311              |  |               | 37.84 |                                    | 53,231 |                                            
|Period 10 (4 weeks ended Oct. 23, 2005) |  | 1,575              |  |               | 34.26 |                                    | 54,806 |                                            
|Period 11 (4 weeks ended Nov. 20, 2005) |  | 1,170              |  |               | 31.75 |                                    | 55,976 |                                            
|Period 12 (5 weeks ended Dec. 25, 2005) |  | 450                |  |               | 32.38 |                                    | 56,426 |                                            

ITEM 6. SELECTED FINANCIAL DATA.

Selected financial data for the years 1995 through 2005 is contained under the heading "Eleven Year Financial Summary" on pages 110 and 111 and is derived
from financial statements for those years. The information contained in the "Eleven Year Financial Summary" is not necessarily indicative of the results of operations to be expected for future years,
and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 and the consolidated financial statements and
related notes thereto included in Item 8 of this Form 10-K which were audited by the Company's independent registered public accounting firm, PricewaterhouseCoopers LLP.

27

---



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion presents the significant factors that have affected the businesses of Tribune Company and its subsidiaries (the "Company") over the last
three years. This commentary should be read in conjunction with the Company's consolidated financial statements and "Eleven Year Financial Summary," which are also presented in this
Form 10-K. Certain prior year amounts have been reclassified to conform with the 2005 presentation. These reclassifications had no impact on reported prior year total revenues,
operating profit or net income.

FORWARD-LOOKING STATEMENTS

The discussion contained in this Item 7 (including, in particular, the discussion under "Overview"), the information contained in Item 7A, "Quantitative
and Qualitative Disclosures about Market Risk," and the information contained in the subsequent notes to the consolidated financial statements, contain certain forward-looking statements that are
based largely on the Company's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ
materially from those expressed in the forward-looking statements including, but not limited to, the items discussed in Item 1A, "Risk Factors." Such risks, trends and uncertainties, which in
some instances are beyond the Company's control, include: changes in advertising demand, circulation levels and audience shares; regulatory and judicial rulings; availability
and cost of broadcast rights; competition and other economic conditions; changes in newsprint prices; changes in the Company's credit ratings and interest rates; changes in accounting standards;
adverse results from litigation, governmental investigations or tax-related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; the effect of acquisitions,
investments and divestitures; the effect of derivative transactions; and the Company's reliance on third-party vendors for various services. The words "believe," "expect," "anticipate," "estimate,"
"could," "should," "intend" and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being
made as of the date of this filing. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

Tribune Company is a media and entertainment company, operating primarily in the United States, that conducts its operations through two business segments:
publishing and broadcasting and entertainment. These segments reflect the manner in which the Company sells its products to the marketplace, manages its operations and makes business decisions. The
Company's media operations are principally in major metropolitan areas of the United States and compete against similar media and other types of media on both a local and national basis.

Publishing
currently consists primarily of 11 daily newspapers, which include related businesses such as interactive websites. Publishing represented 73% of the Company's consolidated
revenues in 2005. About 79% of publishing revenues were derived from advertising. These revenues were generated from the sale of advertising space in published issues of the newspapers and on
interactive websites. Approximately 15% of publishing revenues were generated from the sales of newspapers to individual subscribers or to sales outlets, which re-sell the newspapers. The
remaining 6% of revenues came from a variety of activities including the syndication of columns, features, information and comics to newspapers, commercial printing operations, sales of entertainment
listings and other publishing-related activities.

Publishing
advertising revenues are comprised of three basic categories: retail, national and classified. Changes in advertising revenues are heavily correlated with changes in the level
of economic

28

---



activity
in the United States. Changes in Gross Domestic Product, consumer spending, auto sales, housing sales, unemployment rates, job creation, circulation levels and rates all impact demand for
advertising in the Company's newspapers. The Company's advertising revenues are subject to changes in these factors both on a national level and on a local level in its markets.

Significant
expense categories for publishing include compensation, newsprint and ink and other operating expenses. Compensation, which includes benefits expense, represented 42% of
publishing's consolidated operating expenses in 2005. Compensation expense is affected by many factors, including the level of merit increases, the number of full-time equivalent employees
and changes in the design and costs of the Company's various employee benefit plans. Newsprint and ink represented 15% of the 2005 operating expenses for publishing. The Company consumed approximately
814,000 metric tons of newsprint in 2005. Newsprint is a commodity and pricing can vary significantly between years. Other expenses comprised 43% of total operating expenses. These expenses are
principally for the distribution of the newspaper, promotional activities and other general and administrative expenses. These expenses are typically subject to less variability.

Broadcasting
and entertainment currently consists of 26 television stations, one radio station, the Chicago Cubs and Tribune Entertainment, a company that distributes its own programming
together with programming licensed from third parties. Broadcasting and entertainment represented 27% of the Company's consolidated revenues in 2005. About 88% of these revenues came from the sale of
advertising spots on its television stations. Changes in advertising revenues are heavily correlated with and influenced by changes in the level of economic activity in the United States. Changes in
Gross Domestic Product, consumer spending levels, auto sales, programming content, audience share and rates all impact demand for advertising on the Company's television stations. The Company's
advertising revenues are subject to changes in these factors both on a national level and on a local level in the markets in which it operates.

Significant
expense categories for broadcasting and entertainment include programming expense, compensation and other expenses. Programming expense represented 38% of 2005 expenses. The
level of programming expense is affected by the cost of programs available for purchase and the selection of programs aired by the Company's television stations. Compensation expense represented 41%
of broadcasting and entertainment's 2005 expenses and is impacted by the same factors as noted for publishing. Other expenses represented 21% of total operating expenses and are for promotional
activities and other station operating expenses.

The
Company uses revenues and operating profit as ways to measure the financial performance of its business segments. The Company uses average net paid circulation for its newspapers and
average audience share for its television stations as a means to measure its publishing and broadcasting and entertainment market shares and performance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's significant policies are summarized in Note 1 to the Company's consolidated financial statements in Item 8. These policies conform
with accounting principles generally accepted in the United States of America and reflect practices appropriate to the Company's businesses. The preparation of the Company's consolidated financial
statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
On an on-going
basis, the Company evaluates its policies and estimates, including those related to income taxes, pension and postretirement benefits, broadcast rights, goodwill and other intangible assets,
self-insurance liabilities, accounts receivable allowances and stock-based compensation.

Management
has discussed with the Audit Committee of the Board of Directors the development, selection and disclosure of the critical accounting policies and estimates and the
application of these

29

---



policies
and estimates. In addition, there are other items within the financial statements that require estimation, but are not deemed to be critical accounting policies and estimates. Changes in the
estimates used in these and other items could have a material impact on the financial statements.

Income Taxes

Provisions for federal and state income taxes are calculated on reported pretax earnings based on current tax laws and also include, in the current period, the
cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Taxable income reported to the taxing jurisdictions in which the Company
operates often differs from pretax earnings because some items of income and expense are recognized in different time periods for income tax purposes. The Company provides deferred taxes on these
temporary differences in accordance with Financial Accounting Standard ("FAS") No. 109, "Accounting for Income Taxes." Taxable income also may differ from pretax earnings due to statutory
provisions under which specific revenues are exempt from taxation and specific expenses are not allowable as deductions. The Company establishes reserves for income tax when it is probable that one or
more of the taxing authorities will challenge and disallow a position taken by the Company in its income tax returns and the resulting liability is estimable. The consolidated tax provision and
related accruals include estimates of the potential taxes and related interest as deemed appropriate. These estimates are reevaluated and adjusted, if appropriate, on a quarterly basis. Although
management believes its estimates and judgments are reasonable, the resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower
than that which has been provided by the Company. See Note 12 to the Company's consolidated financial statements in Item 8.

Pension and Postretirement Benefits

The Company provides defined benefit pension, postretirement health care and life insurance benefits to eligible employees under a variety of plans (see
Note 13 to the Company's consolidated financial statements in Item 8). Accounting for pension and postretirement benefits requires the use of several assumptions.

Weighted
average assumptions used each year in accounting for pension benefits and other postretirement benefits were:

|                                                 |  | Pension Benefits |   | Other
Postretirement
Benefits |  
|------------------------------------------------ |  | ---------------- | - | ----------------------------- | -
|
|Discount rate for expense                        |  | 5.75             | % | 6.25                          | %
|Discount rate for obligations                    |  | 5.50             | % | 5.75                          | %
|Increase in future salary levels for expense     |  | 3.50             | % | 3.75                          | %
|Increase in future salary levels for obligations |  | 3.50             | % | 3.50                          | %
|Long-term rate of return on plans' assets        |  | 8.50             | % | 8.50                          | %

The Company expects to use a long-term rate of return assumption of 8.5% in 2006, consistent with the 2005 assumption. The long-term rate
of return assumption is subject to change due to the fluctuation of returns in the overall equity and debt markets. As of the date of this report, a 0.5% decrease in the Company's
long-term rate of return assumption would result in an $8 million increase in the Company's net pension expense. In 2005, the pension
plans' assets earned a return of approximately 8%. The Company will use a discount rate of 5.5% for expense in 2006.

At
Dec. 25, 2005 and Dec. 26, 2004, the Company's prepaid pension asset included an unrecognized net actuarial loss of $870 million and $803 million,
respectively. A significant portion of this net actuarial loss resulted from the difference between the Company's expected returns on plan

30

---



assets
and the actual losses on plan assets in 2002 and 2001. Expected returns on plan assets were $158 million and $176 million in 2002 and 2001, respectively; actual losses were
$161 million and $113 million, respectively. In accordance with FAS No. 87, "Employers' Accounting for Pensions," the actuarial loss will be recognized in net periodic pension
expense over the estimated average remaining service period of active employees expected to receive benefits. The Company's policy is to incorporate asset-related gains and losses into the asset value
used to calculate the expected return on plan assets and into the calculation of amortization of unrecognized net actuarial loss over a four-year period.

In
December 2005, the pension plan benefits for former Times Mirror non-union and non-Newsday employees were frozen. As a result of the plan freeze, a
pretax curtailment gain of $18 million ($13 million at publishing, $1 million at broadcasting and entertainment and $4 million at corporate) was recorded. On March 31, 2006, the pension
plan benefits for Newsday union and non-union employees will be frozen.

The
Company's pension plans' asset allocations at Dec. 25, 2005 and Dec. 26, 2004, were as follows (in millions):

|                        |  | Plan Assets |      
|----------------------- |  | ----------- | -----
|
|
|Equity securities       |  | $           | 1,186
|Fixed income securities |  |             | 329  
|Other                   |  |             | 83   
|                        |  |             |      
|Total                   |  | $           | 1,598
|                        |  |             |      

The Company's current 2006 target allocation for pension plans' assets is 75% in equity securities and 25% in fixed income securities and other.

For
purposes of measuring 2005 postretirement health care costs, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2005. The rate was
assumed to decrease gradually to 5% for 2009 and remain at that level thereafter. For purposes of measuring health care obligations at Dec. 25, 2005, a 9.0% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5% for 2010 and remain at that level thereafter. On Dec. 8, 2003, the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 ("Act") was signed into law. The Act resulted in a $15 million reduction in the accumulated other postretirement obligations for
prior service costs and a $1 million reduction in net periodic postretirement benefit costs.

Assumed
health care cost trend rates have a significant effect on the amounts reported for health care plans. As of the date of this report, a 1% change in assumed health care cost trend
rates would have the following effects (in thousands):

|                               |  | 1% Increase |       | 1% Decrease |  
|------------------------------ |  | ----------- | ----- | ----------- | -
|Service cost and interest cost |  | $           | 372   |             | $
|Projected benefit obligation   |  | $           | 6,218 |             | $

The Company plans to contribute $7 million related to certain of its union and non-qualified pension plans and $13 million to its other
postretirement benefit plans in 2006.

31

---



Expected Future Benefit PaymentsThe following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid (in thousands):

|          |  | Pension
Benefits |         | Other
Postretirement
Benefits
|--------- |  | ---------------- | ------- | -----------------------------
|2006      |  | $                | 77,930  |                              
|2007      |  |                  | 75,222  |                              
|2008      |  |                  | 75,439  |                              
|2009      |  |                  | 76,342  |                              
|2010      |  |                  | 77,548  |                              
|2011-2015 |  |                  | 408,164 |                              

Broadcast Rights

Broadcast rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at the lower of cost or estimated net
realizable value. The total cost of these rights is recorded as an asset and a liability when the program becomes available for broadcast. Syndicated program rights that have limited showings are
generally amortized using an accelerated method as programs are aired. Sports and feature film rights are amortized using the straight-line method. The current portion of broadcast rights
represents those rights available for broadcast that are expected to be amortized in the succeeding year. At Dec. 25, 2005 and Dec. 26, 2004, the Company had broadcast rights assets of
$669 million and $652 million, respectively.

The
Company maintains an allowance for programming that is not expected to be aired by the end of the contract period. This allowance for excess programming inventory is based on a
program-by-program review of the Company's five-year broadcast plans and historical write-off trends. The total reserve balance at Dec. 25, 2005
and Dec. 26, 2004 was $4 million and $5 million, respectively. Actual write-offs in 2005 and 2004 were $1 million and $12 million, respectively. Future
write-offs can vary based on changes in consumer viewing trends and the availability and costs of other programming.

Goodwill and Other Intangible Assets

The Company periodically reviews goodwill and certain intangible assets no longer being amortized for impairment in accordance with FAS No. 142, "Goodwill
and Other Intangible Assets." Under FAS No. 142, the impairment review of goodwill and other intangible assets not subject to amortization must be based generally on fair values.

The
estimated fair value of the reporting units to which goodwill is allocated is determined using multiples of operating cash flows for purposes of analyzing goodwill for impairment.
The estimated fair values of other assets subject to the annual impairment review, which include newspaper mastheads and FCC licenses, are calculated based on projected future discounted cash flow
analyses. The development of market multiples and cash flow projections used in the analyses requires the use of assumptions, including assumptions regarding revenue and market growth. The analyses
use discount rates based on specific economic factors in the publishing and broadcasting industries. These assumptions reflect the Company's best estimates, but these items involve inherent
uncertainties based on market conditions generally outside of the Company's control.

In
the fourth quarter of 2004, the Company elected to early adopt the provisions of the Financial Accounting Standards Board's Emerging Issues Task Force Topic
No. D-108, which requires the use of a direct valuation method for valuing intangible assets, such as FCC licenses, and reviewing them for impairment. Historically, the Company had
been using a residual valuation method to review its FCC licenses for impairment each year. A direct valuation method generally results in a lower valuation than

32

---



does
a residual valuation method. The Company performed an impairment review of its FCC licenses for the year ended Dec. 28, 2003 using a residual method. No impairments were required as a
result of the analyses performed in 2003. The effect of changing to a direct valuation method for the 2004 FCC licenses impairment review was a pretax charge of $29 million ($18 million
after-tax). The charge was recorded in the fourth quarter of 2004 as a cumulative effect of a change in accounting principle in the consolidated statements of income.

Upon
the adoption of FAS No. 142 at the beginning of fiscal 2002, the Company treated the intangible assets associated with network affiliation agreements as having indefinite
lives and stopped recording amortization expense on these assets. In December 2003, the staff of the Securities and Exchange Commission provided guidance regarding their accounting position in
this area indicating that network affiliation agreements should be amortized. As a result, the Company began amortizing these assets in the fourth quarter of 2003 using a 40-year life. The
Company believes the 40-year life is representative of the remaining expected useful life of the network affiliation intangibles. The provisions of FAS No. 142 required the Company
to perform an impairment analysis at the time of a change in the estimated useful life of an intangible asset which was previously not being amortized. No adjustment to the network affiliation
intangible assets was required as a result of this impairment review performed in the fourth quarter of 2003. Beginning in 2004, the Company no longer performs an annual test of the impairment of its
network affiliation agreements under FAS No. 142, but will perform an impairment test if indicators of impairment are present, as required by FAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."

The
Company's goodwill and other intangible assets at Dec. 25, 2005 consisted of the following (in thousands):

|                                                                 |                                | Dec. 25, 2005
|---------------------------------------------------------------- | ------------------------------ | -------------
|
|Intangible assets subject to amortization                        |                                |              
|Subscribers (useful life of 15 to 20 years)                      |                                | $            
|Network affiliation agreements (useful life of 40 years)(1)      |                                |              
|Other (useful life of 3 to 40 years)                             |                                |              
|                                                                 |                                |              
|Total                                                            |                                | $            
|                                                                 |                                |              
|Goodwill and other intangible assets not subject to amortization |                                |              
|Goodwill                                                         |                                |              
|                                                                 | Publishing                     |              
|                                                                 | Broadcasting and entertainment |              
|                                                                 |                                |              
|Total goodwill                                                   |                                |              
|Newspaper mastheads                                              |                                |              
|FCC licenses                                                     |                                |              
|Tradename                                                        |                                |              
|                                                                 |                                |              
|Total                                                            |                                |              
|                                                                 |                                |              
|Total goodwill and other intangible assets                       |                                |              
|                                                                 |                                |              

---

As a result of the United States Tax Court opinion issued on Sept. 27, 2005 related to the Matthew Bender tax dispute, the Company recorded
additional goodwill of $459 million (see Note 12 to the Company's consolidated financial statements in Item 8).

33

---



Self-Insurance Liabilities

The Company self-insures for certain medical and disability benefits, workers' compensation costs and automobile and general liability claims. The
recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. The liabilities include amounts for actual claims, claim growth and claims
incurred but not reported. Actual experience, including claim frequency and severity as well as health care inflation, could result in different liabilities than the amounts currently recorded. The
recorded liabilities for self-insured risks totaled $113 million and $106 million at Dec. 25, 2005 and Dec. 26, 2004, respectively.

Accounts Receivable Allowances

The Company's accounts receivable are primarily due from advertisers. Credit is extended based on an evaluation of a customer's financial condition and generally
collateral is not required. The Company maintains an allowance for uncollectible accounts, rebates and volume discounts. This allowance is determined based on historical write-off
experience and any known specific collectibility exposures. At Dec. 25, 2005 and Dec. 26, 2004, the Company's allowance for accounts receivable was $43 million and
$50 million, respectively.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board ("APB") Opinion No. 25 and related
interpretations. Under APB No. 25, no compensation expense is recorded because the exercise price of employee stock options equals the market price of the underlying stock on the date of grant.

On
June 24, 2005, the Company accelerated the vesting of certain stock options granted on Feb. 11, 2003 and Feb. 10, 2004, totaling 2.4 million in each year.
Unvested stock options awarded to the then current executive officers of the Company on these grant dates, which aggregated 0.8 million and 0.6 million, respectively, were not
accelerated at that time. On Dec. 16, 2005, the Company accelerated the vesting of all stock options granted on Feb. 8, 2005, totaling 3.5 million. Also, on Dec. 16, 2005,
the Company accelerated the remaining unvested stock options granted to the current executive officers of the Company on Feb. 11, 2003 and Feb. 10, 2004, totaling 0.4 million in
both years. All other terms and conditions of the stock option grants remain unchanged.

In
accordance with APB No. 25 and related interpretations, the acceleration of vesting of these stock options did not require accounting recognition in the Company's income
statement. The exercise prices of the 2003, 2004 and 2005 grants were $45.90, $52.05 and $40.59, respectively, and the Company's closing stock prices on the June 24, 2005 and Dec. 16,
2005 dates of acceleration were $35.64 and $30.80, respectively. The impact of the accelerated vesting was to increase pro forma stock-based compensation by $82 million, or $50 million
net of tax, in 2005.

The
accelerated vesting of these stock options was one of several actions the Company has recently taken to reduce stock-based compensation expense that will be recorded in future years
with the adoption of Financial Accounting Standard ("FAS") No. 123R (see discussion below). Over the last two years, the Company has reduced the number of stock options granted by approximately
45%. Also, beginning in 2004, option grants have 8-year terms, down from 10 years for grants in previous years, and do not have a replacement option feature.

Under
FAS No. 123, "Accounting for Stock-Based Compensation," as amended by FAS No. 148, compensation cost is measured at the grant date based on the estimated fair value
of the award and is recognized as compensation expense over the vesting period. For purposes of the disclosure required by FAS No. 123, as amended by FAS No. 148, the Company uses the
Black-Scholes option pricing model to determine the fair value of each option grant. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, expected lives and
risk-free interest rates. These

34

---



assumptions
reflect the Company's best estimates, but these items involve inherent uncertainties based on market conditions generally outside of the control of the Company. As a result, if other
assumptions had been used in the current period, pro forma stock-based compensation, as calculated and disclosed under FAS No. 123, could have been materially impacted. Furthermore, if the
Company uses different assumptions in future periods, share-based compensation expense could be materially impacted.

In
December 2004, the Financial Accounting Standards Board ("FASB") issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes APB No. 25, FAS
No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated fair value of the award
and is required to be recognized as compensation expense over the vesting period. The Company is required to adopt the standard in the first quarter of 2006. The Company plans to use the modified
prospective application, which requires the recognition of share-
based compensation as if the provisions of the standard had been in effect since Dec. 25, 1994 (the beginning of the Company's 1995 fiscal year). The Company expects to record approximately
$33 million of pretax compensation expense in 2006 related to equity grants in 2006 and prior years, as well as the Company's Employee Stock Purchase Plan.

SIGNIFICANT EVENTS

On Jan. 8, 2006, Newsday's six collective bargaining units voted to accept new four-year contracts that include position eliminations, work
rule improvements, lower cost retirement plans and an increase in employee health care contributions, resulting in pretax savings of approximately $7 million in 2006 and more than
$10 million annually thereafter. The Company expects to record one-time pretax charges of approximately $15 million in the first quarter of 2006 related to severance and
other payments associated with the new contracts.

On
Jan. 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its television stations currently affiliated with the WB Network
(including those in New York, Los Angeles and Chicago) with a new broadcast network, The CW Network, being launched in the fall of 2006 by Warner Brothers Entertainment and CBS. The new network will
air a portion of the programming currently on the WB Network and the UPN Network, as well as new programming. The WB Network will shut down at that time. The Company will not incur any costs related
to the shutdown of The WB Network. Three of Tribune's current WB network affiliates (Philadelphia, Atlanta and Seattle) will become independent stations at that time. When regulatory approval of the
new network is received and the new affiliation agreements become effective, the Company will write-off the WB affiliation agreement intangible assets for Philadelphia, Atlanta and Seattle. This
write-off will most likely occur in the second or third quarter of 2006 and will total approximately $15 million before taxes.

Acquisitions

The Company had no significant acquisitions in 2005 and 2004. The Company completed acquisitions totaling approximately $275 million in 2003 for cash and
other consideration, including the value of the Denver radio station group assets that were divested in an exchange transaction during 2003. The results of the acquired companies are included in the
consolidated statements of income since their respective dates of acquisition. None of these acquisitions were material in relation to the Company's consolidated financial statements.

On
March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Ore., from ACME Communications for a
total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a
like-kind asset
exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an estimated fair market value
of $55 million, plus $20 million in cash. The Company allocated $153 million, $42 million and $136 million of the purchase price to FCC licenses, network
affiliations and goodwill, respectively.

35

---



Consolidation of Los Angeles Times' Production Operations

In December 2005, theLos Angeles Timesannounced it would close its San Fernando Valley printing facility
in January 2006 and consolidate production at its remaining three facilities in Los Angeles, Costa Mesa, and Irwindale, California. The closing of the printing facility resulted in the
elimination of approximately 120 positions from across theLos Angeles Times'production facilities.

As
a result of the facility closing, the Company reclassified the San Fernando Valley printing facility land and building as held for sale at Dec 25, 2005. The Company recorded a
$2 million pretax charge in the fourth quarter of 2005 to reduce the carrying value of the San Fernando Valley printing facility's land and building to $24 million, the estimated fair
value of the assets less costs to sell the assets. The Company evaluated the machinery and equipment at the San Fernando Valley printing facility and determined that press and other related equipment
with a net book value of $16 million will be abandoned. Therefore, the Company reduced its estimate of the useful life of the press and other related equipment and recorded accelerated
depreciation of $16 million in the fourth quarter of 2005. The Company has idled the remaining San Fernando Valley machinery and equipment, which had a net book value of $34 million at
Dec. 25, 2005. The Company is currently evaluating alternative uses of this equipment. This evaluation is expected to be completed in 2006.

The
Company recorded a pretax charge in the fourth quarter of 2005 of $22 million, excluding severance related costs, as a result of its decision to close the San Fernando Valley
printing facility. A summary of the significant components of the $22 million pretax charge is as follows (in millions):

|Accelerated depreciation on machinery and equipment |  | $ | 16.1
|--------------------------------------------------- |  | - | ----
|Impairment of assets held for sale                  |  |   | 2.1 
|Other                                               |  |   | 4.0 
|                                                    |  |  
|Total                                               |  | $ | 22.2
|                                                    |  |  

Employee Reductions

The Company reduced its staff by approximately 900 positions in 2005 and recorded a pretax charge of $45 million ($43 million at publishing,
$1 million at broadcasting and entertainment and $1 million at corporate). The eliminations included 120 positions as a result of closing theLos Angeles
Times'San Fernando Valley printing facility, as discussed above. As of Dec. 25, 2005, $7 million had been paid and an accrual of $38 million remained. The
Company recorded a pretax charge of $41 million in 2004 related to the elimination of approximately 600 positions in its publishing segment.

Non-Operating Items

Fiscal years 2005, 2004 and 2003 included several non-operating items. Non-operating items for 2005 are summarized as follows
(in millions, except per share data):

|                                                                     |  | Proceeds |    | Pretax
Gain |   | After-tax
Gain (Loss) |  | Diluted
EPS |     
|-------------------------------------------------------------------- |  | -------- | -- | ----------- | - | --------------------- |  | ----------- | ----
|Gain on change in fair values of derivatives and related investments |  | $        |   |             | $ | 62                    |  | $           | 38  
|Gain on sales of subsidiaries and investments, net                   |  |          | 17 |             |   | 7                     |  |             | 4   
|Other, net                                                           |  |          | 5  |             |   | 1                     |  |             | 1   
|Income tax adjustments                                               |  |          |   |             |   |                      |  |             | (139
|                                                                     |  |          |    |             |   |                       |  |             |     
|Total non-operating items                                            |  | $        | 22 |             | $ | 70                    |  | $           | (96 
|                                                                     |  |          |    |             |   |                       |  |             |     

In 2005, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $62 million non-cash pretax gain

36

---



resulted
from an $85 million decrease in the fair value of the derivative component of the Company's PHONES, which was partially offset by a $23 million decrease in the fair value of
16 million shares of Time Warner common stock.

As
a result of the United States Tax Court opinion issued on Sept. 27, 2005 related to the Matthew Bender tax dispute, the Company recorded additional income tax expense of
$150 million in the third quarter of 2005 (see Note 12 to the Company's consolidated financial statements in Item 8). In the first quarter of 2005, the Company reduced its income
tax expense and liabilities by a total of $12 million as a result of favorably resolving certain other federal income tax issues.

Non-operating
items for 2004 are summarized as follows (in millions, except per share data):

|                                                                     |  | Proceeds |    | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |   | Diluted
EPS |    
|-------------------------------------------------------------------- |  | -------- | -- | ------------------ | - | --------------------- | - | ----------- | ---
|Loss on change in fair values of derivatives and related investments |  | $        |   |                    | $ | (18                   | ) | $           | (11
|Loss on early debt retirement                                        |  |          |   |                    |   | (141                  | ) |             | (87
|Gain on sales of subsidiaries and investments, net                   |  |          | 24 |                    |   | 20                    |   |             | 12 
|Loss on investment write-downs and other, net                        |  |          | 16 |                    |   | (6                    | ) |             | (4 
|                                                                     |  |          |    |                    |   |                       |   |             |    
|Total non-operating items                                            |  | $        | 40 |                    | $ | (145                  | ) | $           | (90
|                                                                     |  |          |    |                    |   |                       |   |             |    

In 2004, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $18 million non-cash pretax loss resulted from a $39 million increase in the fair value of the derivative component of the Company's PHONES, which was
partially offset by a $21 million increase in the fair value of 16 million shares of Time Warner common stock.

In
2004, the Company redeemed all of its outstanding $400 million ($396 million net of unamortized discount) 7.45% debentures due 2009 and retired $66 million
($64 million net of unamortized discount) of its 7.25% debentures due 2013 and $165 million ($160 million net of unamortized discount) of its 6.61% debentures due 2027 through
cash tender offers. The Company paid approximately $760 million
to retire this debt and, as a result, recorded a one-time, pretax loss of $141 million in 2004. The Company funded these transactions with cash and the issuance of commercial paper.

In
2004, the gain on sales of subsidiaries and investments related primarily to the sale of the Company's 50% interest inLa
Opiniónfor $20 million, resulting in a pretax gain of $18 million.

Non-operating
items for 2003 are summarized as follows (in millions, except per share data):

|                                                                     |  | Proceeds |     | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |   | Diluted
EPS |    
|-------------------------------------------------------------------- |  | -------- | --- | ------------------ | - | --------------------- | - | ----------- | ---
|Gain on change in fair values of derivatives and related investments |  | $        |    |                    | $ | 84                    |   | $           | 52 
|Gain on sales of subsidiaries and investments, net                   |  |          | 175 |                    |   | 148                   |   |             | 90 
|Loss on investment write-downs                                       |  |          |    |                    |   | (10                   | ) |             | (6 
|Gain on insurance recoveries                                         |  |          | 27  |                    |   | 22                    |   |             | 14 
|Other non-operating loss, net                                        |  |          |    |                    |   | (3                    | ) |             | (2 
|Income tax adjustments                                               |  |          |    |                    |   |                      |   |             | 25 
|                                                                     |  |          |     |                    |   |                       |   |             |    
|Total non-operating items                                            |  | $        | 202 |                    | $ | 241                   |   | $           | 173
|                                                                     |  |          |     |                    |   |                       |   |             |    

In 2003, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $84 million non-cash pretax gain

37

---



resulted
from an $86 million increase in the fair value of 16 million shares of Time Warner common stock, which was partially offset by a $2 million increase in the fair value of
the derivative component of the PHONES. Also in 2003, the Company determined that the decline in fair value of certain public and private investments was other than temporary and wrote down the
investments to fair value. The write-downs totaled $10 million in 2003.

In
2003, the gain on sales of subsidiaries and investments resulted primarily from the divestiture of the Company's remaining Denver radio station KKHK-FM and the sale of the
Company's investment in The Golf Channel. KKHK-FM, now known as KQMT-FM, plus $20 million in cash, was exchanged for the assets of KWBP-TV, Portland, Ore.
and resulted in a pretax gain of $51 million. The sale of the investment in The Golf Channel resulted in a pretax gain of $48 million.

In
2003, the Company recorded a gain of $22 million as a result of settling the business interruption and property damage insurance claims filed by WPIX-TV, New York,
as a result of the events of Sept. 11, 2001.

In
2003, the Company reduced its income tax expense and liabilities by a total of $25 million as a result of favorably resolving certain state income tax issues.

OTHER DEVELOPMENTS

In February 2004, a purported class action lawsuit was filed in New York Federal Court by certain advertisers of NewsdayandHoy, New York, alleging that they were overcharged for advertising as a result of inflated
circulation numbers at these two publications. The purported class action also alleges that entities that paid aNewsdaysubsidiary to deliver
advertising flyers were overcharged. In July 2004, another lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayalleging
damages resulting from inflatedNewsdaycirculation numbers as well as federal and state antitrust violations. The Company intends to vigorously defend
these suits.

On
June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for bothNewsdayand Hoy, New York for the 12-month period
ending Sept. 30, 2003 and the six-month period ending March 31, 2004. The
circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New
York, conducted by the Company's internal audit staff and the Audit Bureau of Circulations ("ABC"). Subsequent to the June 17th disclosure, the Company continued its internal
review and found additional misstatements for these time periods, as well as misstatements that impacted the 12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the
Company announced additional revisions to the circulation figures forNewsdayandHoy, New York, for the
12-month period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. In November 2004, ABC released its audit reports for NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003. In
March 2005, ABC released its audit reports forNewsdayfor the six-month periods ending March 31, 2004 and Sept. 30,
2004. In May 2005, ABC released its audit reports forHoy, New York, for the six-month periods ending March 31, 2004 and
Sept. 30, 2004. Audited circulation figures for bothNewsdayandHoy, New York, for these periods
were within the ranges previously disclosed. After releasing these reports, ABC recalledNewsday'saudit report and Publisher's Statements covering the
12-month period ending Sept. 30, 2002 and all ofHoy, New York's audit reports and Publisher's Statements covering the periods ending
March 31, 2000 through Sept. 30, 2002, stating that, due to insufficient information, they could not verify circulation for those periods. ABC also withdrew its unqualified opinion as to
the material fairness of the circulation reported forNewsdayfor the 12-month periods ending Sept. 30, 2000 and Sept. 30,
2001, again citing insufficient information necessary to confirm the unqualified opinions. ABC's circulation audit atNewsdayfor the
six-month period ending March 31, 2005 was issued in October 2005 with no significant adjustments. ABC's circulation audit at Hoy, New York, for the six-month period ending March 31, 2005
was issued in January 2006 with no significant adjustments.
Circulation audits atNewsdayandHoy, New York, for the period ending

38

---



September 2005
are ongoing.Hoy, New York, converted to free distribution in January 2006. Due to this change, Hoy, New York's circulation for the period ending
September 2005 and going forward will be audited by the Certified Audit of Circulations.

As
a result of the misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable
cost to settle with advertisers based upon facts available at July 30, 2004, the date of the Company's second quarter 2004 Form 10-Q filing. Subsequent to that date, the
Company found additional circulation misstatements, which increased the cost to settle with advertisers. As a result, the Company recorded an additional pretax charge of $55 million in the
third quarter of 2004 to increase the estimate of the probable cost to settle withNewsdayandHoy, New
York, advertisers to a total of $90 million. The Company will continue to evaluate the adequacy of this charge on an ongoing basis (see Note 3 to the Company's consolidated financial
statements in Item 8).

In
addition to the advertiser lawsuits, several class action and shareholder derivative suits have been filed against the Company and certain of its current and former directors and
officers as a result of the circulation misstatements atNewsdayandHoy, New York. The suits, which are
currently pending in Illinois Federal and State Courts, allege breaches of fiduciary duties and other managerial and director failings under Delaware law, the federal securities laws and ERISA. The
Company believes the complaints are without merit and intends to vigorously defend the suits.

The
Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into the
circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. The Company cannot predict with certainty the outcome of these inquiries.

On
June 2, 2003, the FCC adopted new media ownership rules, including a new television/newspaper cross-ownership rule. The new rule would eliminate the cross-ownership prohibition
entirely in markets with nine or more television stations and permit combinations of one newspaper and one television station in markets having from four to eight television stations. Under this rule,
the Company would be permitted to retain its newspaper and television operations in each of the five markets where it owns bothNew York, Los Angeles, Chicago, South Florida and Hartford.
In September 2003, the United States Court of Appeals for the Third Circuit stayed the effectiveness of the new media ownership rules pending the outcome of appeals by advocacy groups
challenging the new rules. In June 2004, the Third Circuit remanded the new rules to the FCC for further proceedings while keeping the stay in effect. On Jan. 28, 2005, the Company and
other media companies filed a joint petition seeking United States Supreme Court review of the June 2004 Third Circuit remand. On June 13, 2005, the Supreme Court declined to review the
petition, without addressing the Constitutional arguments raised and without foreclosing additional appeals if the Company's interests are not adequately addressed as part of the FCC's remand
proceeding. While the Company remains optimistic that the cross-ownership ban will ultimately be loosened in major markets, it cannot predict with certainty the outcome of the FCC's remand proceeding.
See Item 3, "Legal Proceedings" for a discussion of pending FCC rule review.

39

---



RESULTS OF OPERATIONS

The Company's fiscal year ends on the last Sunday in December. Fiscal years 2005, 2004 and 2003 each comprised 52 weeks.

Consolidated

The Company's consolidated operating results for 2005, 2004 and 2003 are shown in the table below.

|                                 |                                                                    |   |       |      |   |       |      | Change |      
|-------------------------------- | ------------------------------------------------------------------ | - | ----- | ---- | - | ----- | ---- | ------ | -----
|
|Operating revenues               |                                                                    | $ | 5,596 |      | $ | 5,726 |      | $      | 5,595
|Operating profit(1)              |                                                                    | $ | 1,147 |      | $ | 1,218 |      | $      | 1,361
|Net income on equity investments |                                                                    | $ | 41    |      | $ | 18    |      | $      | 6    
|Net income:                      |                                                                    |   |       |      |   |       |      |        |      
|                                 | Before cumulative effect of change in accounting principle         |   | $     | 535  |   | $     | 573  |        | $    
|                                 | Cumulative effect of change in accounting principle, net of tax(2) |   |       |     |   |       | (18  | )      |      
|                                 |                                                                    |   |       |      |   |       |      |        |      
|                                 | Net income                                                         |   | $     | 535  |   | $     | 555  |        | $    
|                                 |                                                                    |   |       |      |   |       |      |        |      
|Diluted earnings per share:      |                                                                    |   |       |      |   |       |      |        |      
|                                 | Before cumulative effect of change in accounting principle         |   | $     | 1.67 |   | $     | 1.72 |        | $    
|                                 | Cumulative effect of change in accounting principle, net of tax(2) |   |       |     |   |       | (.05 | )      |      
|                                 |                                                                    |   |       |      |   |       |      |        |      
|                                 | Net income                                                         |   | $     | 1.67 |   | $     | 1.67 |        | $    
|                                 |                                                                    |   |       |      |   |       |      |        |      

---

Earnings Per Share ("EPS")Diluted EPS in 2005 was $1.67, flat with 2004. The 2005 results included a net
non-operating loss of $.30 per diluted share, a charge of $.04 per diluted share for the shutdown of theLos Angeles Times'San Fernando Valley printing facility, severance charges of $.09 per diluted share for the elimination of approximately 900 positions, primarily in publishing, and a pension curtailment gain of
$.03 per diluted share as a result of the Company's replacement of certain defined benefit plans with a defined contribution plan. Diluted EPS in 2004 was $1.67, down from $2.61 in 2003. The 2004
results included a net non-operating loss of $.28 per diluted share, a charge of $.17 per diluted share related to the anticipated settlement with advertisers regarding
misstated circulation atNewsdayandHoy, New York, a charge of $.07 per diluted share for the
elimination of approximately 600 positions in the publishing group and a one-time charge of $.05 per diluted share for the cumulative effect of a change in accounting principle
related to early adoption of FASB's Emerging

40

---



Issues
Task Force Topic No. D-108, which covers the use of a direct valuation method for intangible assets such as FCC licenses. In 2003, the Company recorded a net
non-operating gain of $.52 per diluted share.

Operating Revenues and ProfitConsolidated operating revenues, depreciation and amortization expense, and operating profit by business
segment were as follows:

|                                            |                                |   |       |       |   |       |       | Change |      
|------------------------------------------- | ------------------------------ | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Operating revenues                          |                                |   |       |       |   |       |       |        |      
|                                            | Publishing                     |   | $     | 4,097 |   | $     | 4,130 |        | $    
|                                            | Broadcasting and entertainment |   |       | 1,499 |   |       | 1,596 |        |      
|                                            |                                |   |       |       |   |       |       |        |      
|Total operating revenues                    |                                | $ | 5,596 |       | $ | 5,726 |       | $      | 5,595
|                                            |                                |   |       |       |   |       |       |        |      
|Depreciation and amortization expense       |                                |   |       |       |   |       |       |        |      
|                                            | Publishing(1)                  |   | $     | 191   |   | $     | 179   |        | $    
|                                            | Broadcasting and entertainment |   |       | 51    |   |       | 52    |        |      
|                                            | Corporate expenses             |   |       | 2     |   |       | 2     |        |      
|                                            |                                |   |       |       |   |       |       |        |      
|Total depreciation and amortization expense |                                | $ | 244   |       | $ | 233   |       | $      | 228  
|                                            |                                |   |       |       |   |       |       |        |      
|Operating profit (loss)(2)                  |                                |   |       |       |   |       |       |        |      
|                                            | Publishing                     |   | $     | 760   |   | $     | 726   |        | $    
|                                            | Broadcasting and entertainment |   |       | 436   |   |       | 544   |        |      
|                                            | Corporate expenses             |   |       | (49   | ) |       | (52   | )      |      
|                                            |                                |   |       |       |   |       |       |        |      
|Total operating profit                      |                                | $ | 1,147 |       | $ | 1,218 |       | $      | 1,361
|                                            |                                |   |       |       |   |       |       |        |      

---

Consolidated operating revenues decreased 2%, or $130 million, in 2005 due to declines in publishing and broadcasting and entertainment
revenues. Consolidated operating revenues increased 2%, or $131 million, in 2004 due to growth in publishing and broadcasting and entertainment revenues.
Excluding all acquisitions and divestitures that affect comparability in the period presented ("on a comparable basis"), revenues were up 2%, or $117 million, in 2004, as a result of
improvements at both segments.

Consolidated
operating profit decreased 6%, or $71 million, in 2005. Publishing operating profit rose 5%, or $34 million, in 2005. Publishing operating profit in 2005
included a $22 million pretax charge for the shutdown of theLos Angeles Times'San Fernando Valley printing facility, pretax severance charges
of $43 million for the elimination of over 800 positions and a pretax pension curtailment gain of $13 million. In 2004, publishing operating profit included a $90 million pretax
charge related to the anticipated settlement with advertisers regarding misstated circulation atNewsdayand Hoy, New York and a $41 million pretax
charge for the elimination of approximately 600 positions. Excluding these charges, publishing operating
expenses increased $13 million in 2005 primarily due to increases in newsprint and ink and outside services expenses, partially offset by lower circulation distribution expense. Publishing
advertising revenues increased $16 million in 2005, while publishing circulation revenues declined 7%, or $48 million. Broadcasting and entertainment operating profit decreased 20%, or
$108 million, in 2005 primarily due to decreased television revenues and increased compensation and programming expenses, partially offset by a rise in Chicago Cubs revenues.

41

---



Consolidated
operating profit decreased 11%, or $143 million, in 2004. On a comparable basis, consolidated operating profit fell 11%, or $146 million, in 2004. Publishing
operating profit fell 18%, or $159 million, in 2004. Publishing operating profit included a $90 million pretax charge related to the anticipated settlement with advertisers regarding
misstated circulation atNewsdayandHoy, New York and a $41 million pretax charge for the
elimination of approximately 600 positions. Excluding these charges, publishing operating expenses increased 4% primarily due to increases in compensation and newsprint and ink expense. Publishing
advertising revenues increased 4%, or $120 million, in 2004. Broadcasting and entertainment operating profit increased 3%, or $15 million, in 2004 primarily due to increased television
revenues and decreased programming expenses, partially offset by higher benefits expense.

Operating ExpensesConsolidated operating expenses were as follows:

|                                    |  |   |       |  |   |       |  | Change |      
|----------------------------------- |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Cost of sales                       |  | $ | 2,737 |  | $ | 2,708 |  | $      | 2,636
|Selling, general and administrative |  |   | 1,468 |  |   | 1,567 |  |        | 1,370
|Depreciation and amortization       |  |   | 244   |  |   | 233   |  |        | 228  
|                                    |  |   |       |  |   |       |  |        |      
|Total operating expenses            |  | $ | 4,449 |  | $ | 4,508 |  | $      | 4,234
|                                    |  |   |       |  |   |       |  |        |      

Cost of sales increased 1%, or $29 million, in 2005 primarily due to higher newsprint and ink, programming and outside services expenses,
partially offset by a decline in circulation distribution expense. Compensation expense was flat compared with 2004. Newsprint and ink expense was up 3%, or $14 million, in 2005, due to a
16% increase in newsprint costs per ton, partially offset by an 11% drop in consumption. The Company's newspapers are transitioning to lighter weight newsprint that on a per ton basis
costs more but yields more pages. The increase in newsprint cost per ton reflects increased market prices and the higher cost of lighter weight paper. Programming expenses increased 1%, or
$6 million, in 2005 due to more program additions in 2005 compared to 2004. Outside services expense increased 11%, or $18 million, in 2005 due largely to higher legal fees and outside
printing costs. Circulation distribution expense declined 1%, or $5 million, primarily due to lower payments to outside contractors as a result of circulation volume declines.

Cost
of sales increased 3%, or $72 million, in 2004. On a comparable basis, cost of sales was up 3%, or $66 million, primarily due to higher compensation and newsprint and
ink expense, partially offset by a decline in programming expenses. Compensation expense rose 8%, or $77 million, in 2004 due to higher retirement plan and other benefit expenses. On a
comparable basis, compensation expense increased 8%, or $76 million, in 2004. Newsprint and ink expense rose 8%, or $35 million, in 2004 as average newsprint cost per ton was up 12%,
while consumption declined 3% in 2004. Programming expenses decreased 6%, or $25 million, in 2004 due to a decline in broadcast rights amortization expense related to fewer program additions in
2004 compared to 2003. On a comparable basis, programming expenses declined 7%, or $30 million, in 2004.

Selling,
general and administrative ("SG&A") expenses were down 6%, or $99 million, in 2005. Compensation expense decreased 1%, or $5 million, in 2005. Compensation expense
in 2005 included a severance charge of $45 million for the elimination of approximately 900 positions and a pension curtailment gain of $18 million, while 2004 compensation expense
included a severance charge of $41 million for the elimination of about 600 positions in the publishing segment. Circulation expense decreased 6%, or $7 million, in 2005. Other SG&A
expenses declined $81 million in 2005. Other SG&A expenses in 2004 included a charge of $90 million related to the anticipated settlement with advertisers regarding misstated circulation
atNewsdayandHoy, New York.

42

---



SG&A
expenses were up 14%, or $197 million, in 2004. On a comparable basis, SG&A expenses increased 14%, or $193 million, in 2004. The increases were primarily due to
higher compensation and other SG&A expenses. Compensation expense increased 7%, or $53 million, in 2004 due to higher retirement plan and other benefit expenses and a pretax charge of
$41 million for the elimination of about 600 positions in the publishing group in 2004. On a comparable basis, compensation expense rose 7%, or $51 million, in 2004. Other SG&A expenses
included a pretax charge of $90 million in 2004 related to the anticipated settlement with advertisers regarding misstated circulation atNewsdayandHoy, New York.

The
increase in depreciation and amortization of intangible assets in 2005 is primarily due to $16 million of accelerated deprecation related to the shutdown of the Los Angeles Times'San Fernando
Valley printing facility. The increase in depreciation and amortization of intangible assets in 2004 primarily reflects
capital expenditures.

Publishing

Operating Revenues and ProfitIn 2005, publishing contributed 73% of the Company's revenues and 66% of its operating profits. Daily
newspaper revenue is derived principally from advertising and circulation sales, which accounted for 79% and 15%, respectively, of the publishing segment's total revenues in 2005. Advertising revenue
is comprised of three basic categories: retail, national and classified. Newspaper advertising volume is categorized as full run inches, part run inches or preprint pieces. Circulation revenue results
from the sale of newspapers. Other publications/services revenue accounted for 6% of the segment's total revenues in 2005 and includes syndication of editorial products, advertising placement
services, direct mail operations, cable television news programming, distribution of entertainment listings and other publishing-related activities.

Explanations
of certain advertising types used in this discussion are as follows:

Retail:

Display or preprint advertising from local retailers, such as department storesNational:

Display or preprint advertising by national advertisers that promote products or brand names on a nation-wide basisClassified:

Local advertising listed together and organized by type (including help wanted, real estate and automotive) and display advertisements in these same categoriesFull run inches:

Advertising appearing in all editions of a newspaperPart run inches:

Advertising appearing in only select editions or zones of a newspaper's marketPreprint pieces:

Advertising supplements prepared by advertisers and inserted into a newspaper


The
table below presents publishing operating revenues, operating expenses and operating profit:

|                   |  |   |       |  |   |       |  | Change |      
|------------------ |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Operating revenues |  | $ | 4,097 |  | $ | 4,130 |  | $      | 4,037
|Operating expenses |  |   | 3,337 |  |   | 3,404 |  |        | 3,152
|                   |  |   |       |  |   |       |  |        |      
|Operating profit   |  | $ | 760   |  | $ | 726   |  | $      | 885  
|                   |  |   |       |  |   |       |  |        |      

43

---



Publishing operating revenues in 2005 decreased 1% to $4.10 billion, down from $4.13 billion in 2004, due mainly to lower circulation revenue in Los Angeles, Chicago and
New York. In 2004, publishing operating revenues were up 2%, or $93 million, compared with 2003, primarily due to increases in advertising revenue in Chicago, New York, Hartford, Los Angeles
and for the Spanish language newspaper,Hoy.

Operating
profit increased 5%, or $34 million, in 2005 primarily due to lower one-time charges as described below. Operating profit decreased 18%, or
$159 million, in 2004 primarily due to the charges described in the following paragraph, higher retirement plan and other benefit expenses, an increase in newsprint and ink expense and the
impact of new publications.

For
2005, publishing operating profit included a pretax charge of $22 million for the shutdown of theLos Angeles Times'San
Fernando Valley printing facility, $43 million of severance charges for the elimination of over 800 positions and a pension curtailment gain of $13 million, as a result of changes to the
retirement programs at the Company. For 2004, publishing operating profit included a pretax charge of $90 million related to the anticipated settlement with advertisers regarding misstated
circulation atNewsdayandHoy, New York, for the periods of September 2001 through
March 2004. Operating profit for 2004 also included a pretax charge of $41 million for the elimination of about 600 positions.

Operating RevenuesTotal operating revenues decreased 1% in 2005 compared to 2004 and increased 2% in 2004 compared to 2003. Total
publishing operating revenues, by classification, were as follows:

|                         |            |   |       |       |   |       |       | Change |      
|------------------------ | ---------- | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Advertising              |            |   |       |       |   |       |       |        |      
|                         | Retail     |   | $     | 1,324 |   | $     | 1,331 |        | $    
|                         | National   |   |       | 774   |   |       | 803   |        |      
|                         | Classified |   |       | 1,146 |   |       | 1,095 |        |      
|                         |            |   |       |       |   |       |       |        |      
|Total advertising        |            |   | 3,244 |       |   | 3,229 |       |        | 3,110
|Circulation              |            |   | 596   |       |   | 644   |       |        | 664  
|Other                    |            |   | 257   |       |   | 257   |       |        | 263  
|                         |            |   |       |       |   |       |       |        |      
|Total operating revenues |            | $ | 4,097 |       | $ | 4,130 |       | $      | 4,037
|                         |            |   |       |       |   |       |       |        |      

Advertising Revenue and VolumeTotal advertising revenues were essentially flat in 2005 compared to 2004. Retail advertising revenue was
down 1%, or $7 million, for the year as decreases in department stores, food & drug stores, electronics and furniture/home furnishings categories, were partially offset by increases in
hardware/home improvement and other retail categories. Preprint revenues, which are primarily included in retail advertising, rose 2%, or $15 million, due to increases at Los Angeles and
Chicago, partially offset by a decrease at Newsday. National advertising revenue
decreased 4%, or $29 million, in 2005 as decreases in wireless, transportation, technology and movies categories were offset by an increase in the financial category. Classified advertising
revenues increased 5%, or $51 million, in 2005 due to increases in real estate and help wanted of 15% and 13%, respectively, partially offset by an 8% decrease in auto. Interactive revenues,
which are included in the above categories, increased 43%, or $53 million, in 2005.

Total
advertising revenues increased 4% in 2004 compared to 2003. Retail advertising revenue was up 2%, or $29 million, for the year as increases in specialty merchandise,
furniture/home furnishings, food & drug stores, hardware/home improvement and health care were partially offset by a decline in general merchandise and department stores. Preprint revenues,
which were the primary contributor to retail advertising growth, rose 9%, or $52 million. Preprint revenue in Los Angeles and Chicago was up 19% and 8%, respectively. National advertising
revenue increased 4%, or $29 million, in 2004 as

44

---



increases
in financial and package goods categories were offset by decreases in movies/entertainment and resorts. Classified advertising revenues increased 6%, or $61 million, in 2004 due to
increases in help wanted and real estate of 10% and 12%, respectively, partially offset by a 2% decrease in auto.

Advertising
volume data for 2005, 2004 and 2003 was as follows:

|                              |            |        |        |        |        |        |        | Change |  
|----------------------------- | ---------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | -
|
|Full run inches               |            |        |        |        |        |        |        |        |  
|                              | Retail     |        | 5,980  |        | 6,200  |        | 5,915  |        | -
|                              | National   |        | 3,774  |        | 3,998  |        | 3,798  |        | -
|                              | Classified |        | 10,023 |        | 10,265 |        | 10,347 |        | -
|                              |            |        |        |        |        |        |        |        |  
|Total full run inches         |            | 19,777 |        | 20,463 |        | 20,060 |        | -      | 3
|Part run inches               |            | 20,112 |        | 20,575 |        | 19,425 |        | -      | 2
|                              |            |        |        |        |        |        |        |        |  
|Total inches                  |            | 39,889 |        | 41,038 |        | 39,485 |        | -      | 3
|                              |            |        |        |        |        |        |        |        |  
|Preprint pieces (in millions) |            | 14,929 |        | 14,680 |        | 13,479 |        | +      | 2

Full run advertising inches were down 3% in 2005 due to decreases in all three major advertising categories. Full run retail advertising inches were down 4%
mainly due to decreases at Southern Connecticut and Baltimore, partially offset by increases at Orlando andHoy. Full run national advertising inches
were down 6% in 2005 primarily due to decreases at Los Angeles, Orlando, Hartford and Baltimore. Full run classified advertising inches fell 2% for the year due to declines at South Florida,
Baltimore,Hoyand Los Angeles, partially offset by an increase at Orlando. Part run advertising inches were down 2% in 2005 due to a decrease at Los
Angeles, partially offset by an improvement at Newsday. Preprint advertising pieces rose 2% for the year due to increases at Los Angeles and Chicago, partially offset by a decrease at Newsday.

Full
run advertising inches were up 2% in 2004 primarily due to increases in retail and national advertising inches. Full run retail advertising inches were up 5% mainly due to increases
related to the new Chicago and Los Angeles editions ofHoy. Full run national advertising inches were up 5% in 2004 primarily due to increases related
toHoy. Full run classified advertising inches fell 1% for the year due to declines at South Florida, Los Angeles and Orlando, partially offset by
increases related toHoy. Part
run advertising inches were up 6% in 2004 due to increases at Chicago andHoy. Preprint advertising pieces rose 9% for the year due to increases at
Chicago, Los Angeles,Hoyand South Florida.

Circulation RevenuesCirculation revenues were down 7% in 2005, primarily due to volume declines, as well as selectively higher discounting.
The largest revenue declines were at Los Angeles, Chicago and Newsday. Circulation revenues were down 3% in 2004, primarily due to declines at Los Angeles and Newsday.

Other RevenuesOther revenues are derived from advertising placement services; the syndication of columns, features, information and comics
to newspapers; commercial printing operations; delivery of other publications; direct mail operations; cable television news programming; distribution of entertainment listings; and other
publishing-related activities. Other revenues were flat in 2005 compared to 2004. Other revenues decreased 2%, or $6 million, in 2004 mainly due to decreases at New York and Orlando.

45

---



Operating ExpensesOperating expenses for 2005, 2004 and 2003 were as follows:

|                               |  |   |       |  |   |       |  | Change |      
|------------------------------ |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Compensation                   |  | $ | 1,396 |  | $ | 1,410 |  | $      | 1,315
|Circulation distribution       |  |   | 462   |  |   | 474   |  |        | 458  
|Newsprint and ink              |  |   | 491   |  |   | 477   |  |        | 441  
|Outside services               |  |   | 310   |  |   | 289   |  |        | 280  
|Promotion                      |  |   | 109   |  |   | 110   |  |        | 107  
|Depreciation and amortization  |  |   | 191   |  |   | 179   |  |        | 176  
|NewsdayandHoy, New York charge |  |   |      |  |   | 90    |  |        |     
|Other                          |  |   | 378   |  |   | 375   |  |        | 375  
|                               |  |   |       |  |   |       |  |        |      
|Total operating expenses       |  | $ | 3,337 |  | $ | 3,404 |  | $      | 3,152
|                               |  |   |       |  |   |       |  |        |      

---

Publishing operating expenses decreased 2%, or $67 million, in 2005 primarily due to the absence of the NewsdayandHoy, New York charge and a decrease in compensation and circulation distribution expenses,
partially offset by increases in newsprint and ink, outside services and depreciation and amortization expense. Publishing operating expenses in 2004 included a charge of $90 million related to
the anticipated settlement with advertisers regarding misstated circulation atNewsdayandHoy, New
York. Compensation expense decreased 1%, or $14 million, in 2005, primarily due to the $13 million pension curtailment gain. The Company recorded $43 million of severance charges
for the elimination of over 800 positions in 2005 and $41 million of severance charges in for the elimination of about 600 positions in 2004. Circulation distribution expense declined 2%, or
$12 million, due to lower payments to outside contractors primarily as a result of circulation volume declines. Newsprint and ink expense was up 3%, or $14 million, in 2005, as newsprint
cost per ton increased 16%, while consumption decreased 11%. The Company's newspapers are transitioning to lighter weight newsprint that on a per ton basis costs more but yields more pages. The
increase in newsprint cost per ton reflects increased market prices and the higher cost of lighter weight paper. Outside services expense rose 7%, or $21 million, in 2005 due largely to higher
legal fees and outside printing costs. Depreciation and amortization expense increased 7%, or $12 million, primarily due to $16 million of accelerated depreciation as a result of the
decision to shutdown theLos Angeles Times'San Fernando Valley printing facility.

Publishing
operating expenses rose 8%, or $252 million, in 2004 primarily due to higher compensation expense, increased newsprint and ink expense and the NewsdayandHoy, New York, charge, as well as an increase in expenses related to new publications.
Compensation expense rose 7%, or $95 million, in 2004 primarily due to higher retirement plan and other benefit expenses and the $41 million charge related to the elimination of
approximately 600 positions. Newsprint and ink expense was up 8%, or $36 million, in 2004, as average newsprint prices increased 12%, while consumption decreased 3%. The Company recorded a
$90 million charge for the estimated cost to settle with advertisers as a result of the reduced reported circulation atNewsdayand Hoy, New York. The
increase in operating expenses associated with new publications, included in the above categories, totaled about $32 million
in 2004.

Broadcasting and Entertainment

Operating Revenues and ProfitIn 2005, broadcasting and entertainment contributed 27% of the Company's revenues and 38% of its operating
profits. The following table presents broadcasting and entertainment operating revenues, operating expenses and operating profit for television and radio/entertainment. The Company's broadcasting
operations at the end of 2005 included 26 television

46

---



stations.
Radio/entertainment includes WGN-AM, Chicago, Tribune Entertainment and the Chicago Cubs.

|                         |                     |   |       |       |   |       |       | Change |      
|------------------------ | ------------------- | - | ----- | ----- | - | ----- | ----- | ------ | -----
|
|Operating revenues       |                     |   |       |       |   |       |       |        |      
|                         | Television          |   | $     | 1,250 |   | $     | 1,353 |        | $    
|                         | Radio/entertainment |   |       | 249   |   |       | 243   |        |      
|                         |                     |   |       |       |   |       |       |        |      
|Total operating revenues |                     | $ | 1,499 |       | $ | 1,596 |       | $      | 1,558
|                         |                     |   |       |       |   |       |       |        |      
|Operating expenses       |                     |   |       |       |   |       |       |        |      
|                         | Television          |   | $     | 847   |   | $     | 827   |        | $    
|                         | Radio/entertainment |   |       | 215   |   |       | 225   |        |      
|                         |                     |   |       |       |   |       |       |        |      
|Total operating expenses |                     | $ | 1,062 |       | $ | 1,052 |       | $      | 1,029
|                         |                     |   |       |       |   |       |       |        |      
|Operating profit         |                     |   |       |       |   |       |       |        |      
|                         | Television          |   | $     | 403   |   | $     | 526   |        | $    
|                         | Radio/entertainment |   |       | 33    |   |       | 18    |        |      
|                         |                     |   |       |       |   |       |       |        |      
|Total operating profit   |                     | $ | 436   |       | $ | 544   |       | $      | 529  
|                         |                     |   |       |       |   |       |       |        |      

Broadcasting and entertainment revenues decreased 6%, or $97 million, in 2005 due mainly to lower television revenues, partially offset by an increase in
radio/entertainment revenues. Television revenues decreased 8%, or $103 million, in 2005 due to lower advertising revenues. Television advertising revenues reflected weakness in the telecom,
automotive, and food categories, partially offset by increases in the financial and education categories. In addition, station revenues in New York, Los Angeles, Chicago and Boston were impacted by
lower audience ratings due in part to the use of Nielsen's Local People Meters ("LPMs") in these markets. Compared to Nielsen's previous measurement methodology, LPMs have tended to reduce the overall
share of broadcast television in relation to cable television and, within the broadcast television universe, disadvantage stations like Tribune's that target younger audiences. Radio/entertainment
revenues increased 2%, or $6 million, in 2005 due to an increase at the Chicago Cubs, partially offset by lower revenues at Tribune Entertainment. Chicago Cubs revenues increased primarily as a
result of growth in marketing and broadcasting revenues, while Tribune Entertainment revenues declined due to lower syndication revenues.

Broadcasting
and entertainment revenues rose 2%, or $38 million, in 2004 due mainly to increased television revenues. Excluding the acquisitions of KPLR-TV,
St. Louis (March 2003), and KWBP-TV, Portland, Ore. (March 2003) ("on a comparable basis"), broadcasting and entertainment revenues increased 2%, or
$24 million. Television revenues increased 2%, or $30 million, in 2004. Television advertising growth was driven by gains in the telecom, education and fast food/restaurant categories,
offset by softness in movies, retail and automobiles. On a comparable basis, television revenues were up 1%, or $16 million, due to higher advertising revenues.

Operating
profit for broadcasting and entertainment was down 20%, or $108 million, in 2005. Television operating profit declined 23%, or $123 million, in 2005 due to lower
operating revenues and increased compensation and programming expenses. Radio/entertainment operating profit increased 80%, or $15 million, in 2005 due to higher revenues at the Chicago Cubs
and lower operating expenses primarily due to fewer programs in production at Tribune Entertainment.

Operating
profit for broadcasting and entertainment was up 3%, or $15 million, in 2004 due to increased television operating profit. On a comparable basis, operating profit was up
2%, or

47

---



$12 million.
Television operating profit rose 4%, or $19 million, in 2004 due to increased television revenues and lower programming expenses, partially offset by increased benefits
expense. On a comparable basis, television operating profit increased 3%, or $15 million. The 2004 decline in radio and entertainment operating profit primarily reflects the absence of
post-season revenues reported by the Chicago Cubs in 2003.

Operating ExpensesOperating expenses for 2005, 2004 and 2003 were as follows:

|                              |  |   |       |  |   |       |  | Change |      
|----------------------------- |  | - | ----- |  | - | ----- |  | ------ | -----
|
|Compensation                  |  | $ | 431   |  | $ | 421   |  | $      | 385  
|Programming                   |  |   | 406   |  |   | 400   |  |        | 425  
|Depreciation and amortization |  |   | 51    |  |   | 52    |  |        | 50   
|Other                         |  |   | 174   |  |   | 179   |  |        | 169  
|                              |  |   |       |  |   |       |  |        |      
|Total operating expenses      |  | $ | 1,062 |  | $ | 1,052 |  | $      | 1,029
|                              |  |   |       |  |   |       |  |        |      

Broadcasting and entertainment operating expenses increased 1%, or $10 million, in 2005 due to an increase in compensation and programming expenses,
partially offset by a decrease in other expenses. Compensation expense increased 2%, or $10 million, in 2005 due to higher player compensation at the Chicago Cubs and increases in television.
Programming expenses were up 1%, or $6 million, in 2005 due to higher broadcast rights amortization. Other expenses dropped 2%, or $5 million, in 2005.

Broadcasting
and entertainment operating expenses increased 2%, or $23 million, in 2004. On a comparable basis, broadcasting and entertainment operating expenses were up 1%, or
$12 million, due to an increase in compensation and other expenses, partially offset by a decrease in programming expenses. Compensation expense increased 9%, or $36 million, in 2004 due
to higher retirement plan and other benefit expenses. On a comparable basis, compensation costs rose 9%, or $33 million. Other expenses were up 5%, or $10 million, in 2004 due to higher
selling and administrative costs. On a comparable basis, other expenses increased 4%, or $7 million. Programming expenses dropped 6%, or $25 million, in 2004 due to a decline in
broadcast rights amortization expense related to fewer program additions in 2004 compared to 2003. On a comparable basis, programming expenses decreased 7%, or $30 million.

Equity Results

|                                 |  |   |    |  |   |    |  | Change |  
|-------------------------------- |  | - | -- |  | - | -- |  | ------ | -
|
|Net income on equity investments |  | $ | 41 |  | $ | 18 |  | $      | 6

Equity income totaled $41 million in 2005, an increase of $23 million from 2004. The increase primarily reflects improvements at TV Food Network and
Comcast SportsNet Chicago. In addition, the Company is no longer recording losses for The WB Network as the Company's recorded investment has been reduced to zero and has no future funding
commitments.

Equity
income totaled $18 million in 2004, an increase of $12 million from 2003. The increase was primarily due to additional equity income from TV Food Network and the
recognition of equity income from Comcast SportsNet Chicago, partially offset by increased equity losses from The WB Network.

See
Note 6 to the Company's consolidated financial statements in Item 8 for discussion of the Company's investments in TMCT I and TMCT II which involve
agreements with two of the Company's largest shareholders, Chandler Trust No. 1 and Chandler Trust No. 2.

48

---



Interest and Dividend Income and Interest Expense

|                             |  |   |      |   |   |      |   | Change |     
|---------------------------- |  | - | ---- | - | - | ---- | - | ------ | ----
|
|Interest and dividend income |  | $ | 7    |   | $ | 3    |   | $      | 6   
|Interest expense             |  | $ | (155 | ) | $ | (153 | ) | $      | (198

Interest and dividend income increased to $7 million in 2005, from $3 million in 2004, due to higher cash balances and $1.9 million of
dividend income related to the Company's investment in 19 million Time Warner shares. In September 2005, Time Warner paid a quarterly dividend of $.05 per share. In 2004, interest and
dividend income declined $3 million compared to 2003.

Interest
expense increased 1% in 2005 primarily due to new long-term notes issued in August 2005 and the issuance of commercial paper in September 2005 to pay
the federal portion of the Matthew Bender and Mosby tax liabilities (see Note 8 to the Company's consolidated financial statements in Item 8). Interest expense decreased 23% in 2004
primarily due to the retirement of higher interest rate debt, which was replaced with commercial paper. Excluding the PHONES, the average
debt level was $2.1 billion in 2005, $2.1 billion in 2004 and $2.4 billion in 2003. Including the PHONES, average debt levels were $2.6 billion in 2005, $2.6 billion
in 2004 and $2.9 billion in 2003. Excluding the PHONES, outstanding debt was $2.8 billion at year-end 2005, $2.0 billion at year-end 2004 and
$2.0 billion at year-end 2003. Including the PHONES, outstanding debt was $3.3 billion at year-end 2005, $2.6 billion at year-end 2004 and
$2.6 billion at year-end 2003.

Other

Corporate expenses for 2005, 2004 and 2003 were as follows:

|                   |  |   |     |   |   |     |   | Change |    
|------------------ |  | - | --- | - | - | --- | - | ------ | ---
|
|Corporate expenses |  | $ | (49 | ) | $ | (52 | ) | $      | (53

Corporate expenses decreased 5%, or $3 million, in 2005 compared to 2004 primarily due to a pension curtailment gain of approximately $4 million as
a result of changes to the retirement programs at the Company. Corporate expenses decreased 2%, or $1 million, in 2004 compared to 2003 due to lower compensation expense.

The
effective tax rate in 2005 was 51.8%, compared with a rate of 39.1% in 2004 and 37.0% in 2003. In the third quarter of 2005, the Company recorded additional income tax expense of
$150 million related to the Matthew Bender and Mosby tax liabilities (see Note 12 to the Company's consolidated financial statements in Item 8). In the first quarter of 2005, the
Company reduced its income tax expense and liabilities by $12 million as a result of favorably resolving certain other federal income tax issues. The
Company reduced its income tax expense and liabilities by a total of $25 million in 2003 as a result of favorably resolving certain state and federal income tax issues.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow generated from operations is the Company's primary source of liquidity. Net cash provided by operations was $659 million in 2005, down from
$1.1 billion in 2004. The decrease was mainly due to the payment of the federal portion of the Matthew Bender and Mosby tax liabilities. The Company expects to fund dividends, capital
expenditures and other operating requirements with net cash provided by operations. Funding required for share repurchases and acquisitions is financed by available cash flow from operations and, if
necessary, by the issuance of debt and proceeds from the issuance of stock related to stock option exercises.

49

---



Net
cash used for investments totaled $725 million in 2005 compared with $226 million in 2004. The Company spent $206 million for capital expenditures during 2005.
The Company spent $78 million in cash for investments and received $23 million from the sale of investments in 2005. As a result of the United States Tax Court opinion issued on
September 27, 2005 related to the Matthew Bender tax dispute, the Company recorded additional goodwill of $459 million (see Note 12 to the Company's consolidated financial
statements in Item 8).

Net
cash provided by financing activities was $92 million in 2005 and included net proceeds from the issuance of commercial paper and long-term debt and from sales of stock to
employees, partially offset by repayments of long-term debt, repurchases of common stock and payments of dividends. The Company repaid $199 million of long-term debt in
2005. During 2005, the Company repurchased 12.2 million shares of its common stock in the open market for $440 million. Under the new 2005 stock repurchase authorization, the Company may
buy back an additional $1 billion of its common stock. Dividends paid on common and preferred shares totaled $233 million in 2005. Quarterly dividends per share on common stock were $.18
in 2005, up from $.12 in 2004.

At
Dec. 25, 2005, the Company had revolving credit agreements with a number of financial institutions providing for borrowings in an aggregate amount of up to $1.2 billion.
The revolving credit agreements allow the Company to elect one-month to twelve-month LIBOR rates, based on the term of the borrowing. At Dec. 25, 2005, the one-month
LIBOR rate was 4.38% and the twelve-month LIBOR rate was 4.85%. The agreements contain covenants which require the Company to maintain a minimum interest coverage ratio. No amounts were borrowed under
the agreements at Dec. 25, 2005, and the Company was in compliance with the covenants.

The
Company regularly issues commercial paper for cash requirements and maintains revolving credit agreements equal to or in excess of any commercial paper outstanding. As of
Dec. 25, 2005, the Company had $924 million of commercial paper outstanding. On Sept. 30, 2005, the Company paid $880 million to the Internal Revenue Service ("IRS"),
representing the federal tax and interest owed on the Matthew Bender and Mosby transactions, and financed the payment through the issuance of commercial paper. The Company expects to make related
state tax and interest payments of approximately $125 million by mid 2006 (see Note 12 to the Company's consolidated financial statements in Item 8).

The
Company's commercial paper is rated "A-2," "P-2," "F-2" and "R-1 (low)" by Standard & Poor's ("S&P"), Moody's Investors
Services ("Moody's"), Fitch Ratings ("Fitch") and Dominion Bond Rating Service ("Dominion"), respectively. The Company's senior unsecured long-term debt is rated "A-" by S&P,
"A3" by Moody's, "A-" by Fitch and "A (low)" by Dominion. In addition, S&P and Moody's have "stable" outlooks on the Company while Fitch has a "negative" outlook.

The
Company has for several years maintained active debt shelf registration statements for its medium-term note program and other financing needs. The $778 million
debt financing completed in the third quarter of 2005 used the remaining capacity under these shelf registration statements. A new $1 billion shelf registration statement was declared effective
in February 2006. Proceeds from any future debt issuances under the new shelf would be used for general corporate purposes, including repayment of debt, capital expenditures, working capital,
financing of acquisitions and stock repurchase programs.

The
notes issued by the Employee Stock Ownership Plan ("ESOP") matured on Dec. 16, 2003 and were fully repaid. The notes were unconditionally guaranteed by the Company as to
payment of principal and interest (see Note 15 to the Company's consolidated financial statements in Item 8).

Off-Balance Sheet ArrangementsOff-balance sheet arrangements as defined by the Securities and Exchange Commission
include the following four categories: obligations under certain guarantees or contracts; retained or contingent interests in assets transferred to an unconsolidated entity or similar

50

---



arrangements;
obligations under certain derivative arrangements; and obligations under material variable interests. The Company has not entered into any material arrangements, which would fall under
any of these four categories, which would be reasonably likely to have a current or future material effect on the Company's financial condition, revenues or expenses, results of operations, liquidity
or capital expenditures.

Contractual ObligationsThe table below presents long-term debt maturities, required payments under contractual agreements for
broadcast rights recorded in the consolidated balance sheets and future minimum lease payments to be made under non-cancelable operating leases as of Dec. 25, 2005 (in thousands).

|Fiscal Year |  | Long-term Debt |           | Broadcast Rights
Contracts Payable(1) |   | Future
Minimum
Lease Payments(2) |  | Total
|----------- |  | -------------- | --------- | ------------------------------------- | - | -------------------------------- |  | -----
|2006        |  | $              | 302,460   |                                       | $ | 329,930                          |  | $    
|2007        |  |                | 18,550    |                                       |   | 195,935                          |  |      
|2008        |  |                | 1,482,247 |                                       |   | 138,731                          |  |      
|2009        |  |                | 13,224    |                                       |   | 91,485                           |  |      
|2010        |  |                | 451,056   |                                       |   | 45,500                           |  |      
|Thereafter  |  |                | 994,185   |                                       |   | 57,227                           |  |      
|            |  |                |           |                                       |   |                                  |  |      
|Total       |  | $              | 3,261,722 |                                       | $ | 858,808                          |  | $    
|            |  |                |           |                                       |   |                                  |  |      

---

Capital SpendingThe Company spent $206 million for capital expenditures during 2005 and $217 million in 2004
(see Note 17 to the Company's consolidated financial statements in Item 8 for capital spending by business segment.) The Company classifies capital expenditures that are expected to
provide a rate of return on investment above an internally set minimum rate as growth expenditures. The Company spent $87 million in 2005 and $119 million in 2004 on growth expenditures,
primarily in publishing.

Major
capital projects that were in process during 2005 included the expansion of preprint inserting operations and color press capacities and the implementation of a new standard
advertising system.

Capital
spending for the expansion of preprint inserting capacity in Los Angeles, South Florida and Orlando totaled $6 million in 2005. During 2004 and 2003, the Company spent
$7 million and $12 million, respectively. The Los Angeles and South Florida expansions were operational in 2004. As of Dec. 25, 2005, the installation of additional equipment and
systems at Orlando was in progress. The Orlando expansion is scheduled to be completed by mid-2006 with additional capital spending of approximately $4 million in 2006.

The
Company's Los Angeles, Chicago and South Florida newspapers are increasing their color press capacities. The Los Angeles expansion was operational in 2005, while the Chicago and
South Florida expansions are scheduled to be completed in late 2006. Capital spending for the color

51

---



expansion
at these three newspapers totaled $45 million, $78 million and $8 million in 2005, 2004 and 2003, respectively. Additional capital spending of $15 million is
expected for the color expansions in 2006.

With
respect to the advertising systems project, the Company is in the process of implementing a new standard advertising system in all ten of its newspaper markets at a total estimated
capital cost of approximately $80 million. The project began in 2004 and is expected to be completed by early 2008. Capital spending for this project totaled $12 million in 2005 and
$4 million in 2004. Capital spending for this project is expected to be approximately $35 million in 2006.

The
Company expects 2006 capital expenditures to be somewhat higher than 2005. Management reviews the capital expenditure program periodically and modifies it as required to meet current
business needs. It is expected that 2006 capital expenditures will be funded from cash flow generated from operations.

Effects of InflationThe Consumer Price Index, a widely used measure of the impact of changing prices, has increased only moderately in
recent years, up between 2% and 3% each year since 1991. This level of inflation has not impacted the Company's operations significantly, nor have historically higher inflation levels that prevailed
prior to 1991. The principal effect of inflation on the Company's operating results is to increase costs. Subject to normal competitive conditions, the Company generally has demonstrated an ability to
raise sales prices to offset these cost increases.

52

---





ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate RiskAll of the Company's borrowings are denominated in U.S. dollars. The Company's policy is to manage interest rate risk by
issuing long-term debt and medium-term notes at fixed interest rates and short-term promissory notes.

Information
pertaining to the Company's debt at Dec. 25, 2005 is shown in the table below (in thousands).

|Maturities                     |  | Fixed Rate
Debt |           | Weighted Avg.
Interest Rate |     | Variable Rate
Debt |   | Weighted Avg.
Interest Rate |  | Total
Debt
|------------------------------ |  | --------------- | --------- | --------------------------- | --- | ------------------ | - | --------------------------- |  | ----------
|2006(1)(2)                     |  | $               | 578,928   |                             | 4.6 | %                  | $ | 923,532                     |  | 4.4       
|2007                           |  |                 | 18,550    |                             | 7.7 | %                  |   |                            |  |          
|2008                           |  |                 | 282,247   |                             | 5.8 | %                  |   |                            |  |          
|2009                           |  |                 | 13,224    |                             | 7.7 | %                  |   |                            |  |          
|2010                           |  |                 | 451,056   |                             | 4.9 | %                  |   |                            |  |          
|Thereafter(3)(4)               |  |                 | 994,185   |                             | 3.9 | %                  |   |                            |  |          
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Total at Dec. 25, 2005         |  | $               | 2,338,190 |                             |     |                    | $ | 923,532                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Fair Value at Dec. 25, 2005(5) |  | $               | 2,363,176 |                             |     |                    | $ | 923,532                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           

---

53

---



Information pertaining to the Company's debt at Dec. 26, 2004 is shown in the table below (in thousands).

|Maturities                     |  | Fixed Rate
Debt |           | Weighted Avg.
Interest Rate |     | Variable Rate
Debt |   | Weighted Avg.
Interest Rate |  | Total
Debt
|------------------------------ |  | --------------- | --------- | --------------------------- | --- | ------------------ | - | --------------------------- |  | ----------
|2005(1)(2)                     |  | $               | 483,767   |                             | 3.7 | %                  | $ | 773,206                     |  | 2.4       
|2006                           |  |                 | 309,268   |                             | 6.8 | %                  |   |                            |  |          
|2007                           |  |                 | 17,545    |                             | 7.7 | %                  |   |                            |  |          
|2008                           |  |                 | 281,135   |                             | 5.8 | %                  |   |                            |  |          
|2009                           |  |                 | 12,020    |                             | 7.7 | %                  |   |                            |  |          
|Thereafter(3)(4)               |  |                 | 712,759   |                             | 3.6 | %                  |   |                            |  |          
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Total at Dec. 26, 2004         |  | $               | 1,816,494 |                             |     |                    | $ | 773,206                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           
|Fair Value at Dec. 26, 2004(5) |  | $               | 1,950,114 |                             |     |                    | $ | 773,206                     |  |           
|                               |  |                 |           |                             |     |                    |   |                             |  |           

---

Equity Price Risk

Available-For-Sale SecuritiesThe Company has common stock investments in publicly traded companies that are subject
to market price volatility. Except for 16 million shares of Time Warner common stock (see discussion below), these investments are classified as available-for-sale
securities and are recorded on the balance sheet at fair value with unrealized gains or losses, net of related tax effects, reported in the accumulated other comprehensive income component of
shareholders' equity.

2005The following analysis presents the hypothetical change at Dec. 25, 2005 in the fair value of the Company's common stock
investments in publicly traded companies that are classified as available-for-sale, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in each
stock's price. As of Dec. 25, 2005, the Company's common stock investments in publicly traded

54

---



companies
consisted primarily of 3.1 million shares of Time Warner common stock unrelated to PHONES (see discussion below in "Derivatives and Related Trading Securities").

|                                             |  | Valuation of Investments
Assuming Indicated Decrease
in Stock's Price |        |  |   | Valuation of Investments
Assuming Indicated Increase
in Stock's Price
|-------------------------------------------- |  | --------------------------------------------------------------------- | ------ |  | - | ---------------------------------------------------------------------
|
|
|Common stock investments in public companies |  | $                                                                     | 38,139 |  | $ | 43,588                                                               

---

During the last 12 quarters preceding Dec. 25, 2005, market price movements caused the fair value of the Company's common stock investments
in publicly traded companies to change by 10% or more in three of the quarters, by 20% or more in one of the quarters and by 30% or more in one of the quarters.

2004The following analysis presents the hypothetical change at Dec. 26, 2004 in the fair value of the Company's common stock
investments in publicly traded companies that are classified as available-for-sale, assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in each
stock's price. As of Dec. 26, 2004, the Company's common stock investments in publicly traded companies consisted primarily of 3.1 million shares of Time Warner common stock unrelated to
PHONES (see discussion below in "Derivatives and Related Trading Securities").

|                                             |  | Valuation of Investments
Assuming Indicated Decrease
in Stock's Price |        |  |   | Valuation of Investments
Assuming Indicated Increase
in Stock's Price
|-------------------------------------------- |  | --------------------------------------------------------------------- | ------ |  | - | ---------------------------------------------------------------------
|
|
|Common stock investments in public companies |  | $                                                                     | 41,890 |  | $ | 47,875                                                               

---

During the last 12 quarters preceding Dec. 26, 2004, market price movements caused the fair value of the Company's common stock investments
in publicly traded companies to change by 10% or more in six of the quarters, by 20% or more in three of the quarters and by 30% or more in two of the quarters.

Derivatives and Related Trading SecuritiesThe Company issued 8 million PHONES in April 1999 indexed to the value of its
investment in 16 million shares of Time Warner common stock (see Note 8 to the Company's consolidated financial statements in Item 8). Beginning in the second quarter of 1999,
this investment in Time Warner is classified as a trading security, and changes in its fair value, net of the changes in the fair value of the related derivative component of the PHONES, are recorded
in the statement of income.

At
maturity, the PHONES will be redeemed at the greater of the then market value of two shares of Time Warner common stock or the principal value of the PHONES ($156.84 per PHONES at
Dec. 25, 2005). At Dec. 25, 2005 and Dec. 26, 2004, the PHONES carrying value was approximately $510 million and $585 million, respectively. Since the issuance of
the PHONES in April 1999, changes in the fair value of the derivative component of the PHONES have partially offset changes in the fair value of the related Time Warner shares. There have been
and may continue to be periods with significant non-cash increases or decreases to the Company's net income pertaining to the PHONES and the related Time Warner shares.

55

---



2005The following analysis presents the hypothetical change at Dec. 25, 2005, in the fair value of the Company's 16 million
shares of Time Warner common stock related to the PHONES assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in the stock's price.

|                         |  | Valuation of Investment
Assuming Indicated Decrease
in Stock Price |         |  |   | Valuation of Investment
Assuming Indicated Increase
in Stock Price
|------------------------ |  | ------------------------------------------------------------------ | ------- |  | - | ------------------------------------------------------------------
|
|
|Time Warner common stock |  | $                                                                  | 198,016 |  | $ | 226,304                                                           

During the last 12 quarters preceding Dec. 25, 2005, market price movements have caused the fair value of the Company's 16 million
shares of Time Warner common stock to change by 10% or more in three of the quarters, by 20% or more in one of the quarters and by 30% or more in one of the quarters.

2004The following analysis presents the hypothetical change at Dec. 26, 2004, in the fair value of the Company's 16 million
shares of Time Warner common stock related to the PHONES assuming hypothetical stock price fluctuations of plus or minus 10%, 20% and 30% in the stock's price.

|                         |  | Valuation of Investment
Assuming Indicated Decrease
in Stock Price |         |  |   | Valuation of Investment
Assuming Indicated Increase
in Stock Price
|------------------------ |  | ------------------------------------------------------------------ | ------- |  | - | ------------------------------------------------------------------
|
|
|Time Warner common stock |  | $                                                                  | 214,368 |  | $ | 244,992                                                           

During the last 12 quarters preceding Dec. 26, 2004, market price movements have caused the fair value of the Company's 16 million
shares of Time Warner common stock to change by 10% or more in six of the quarters, by 20% or more in three of the quarters and by 30% or more in two of the quarters.

56

---





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

|                                                                                                                          |                                                              | Page
|------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----
|Report of Independent Registered Public Accounting Firm                                                                   |                                                              | 59  
|Management's Responsibility for Financial Statements and Management's Report on Internal Control Over Financial Reporting |                                                              | 61  
|Consolidated Statements of Income for each of the three fiscal years in the period ended Dec. 25, 2005                    |                                                              | 63  
|Consolidated Balance Sheets at Dec. 25, 2005 and Dec. 26, 2004                                                            |                                                              | 64  
|Consolidated Statements of Shareholders' Equity for each of the three fiscal years in the period ended Dec. 25, 2005      |                                                              | 66  
|Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended Dec. 25, 2005                |                                                              | 68  
|Notes to Consolidated Financial Statements                                                                                |                                                              |     
|                                                                                                                          | Note 1: Summary of Significant Accounting Policies           |     
|                                                                                                                          | Note 2: Changes in Operations and Non-Operating Items        |     
|                                                                                                                          | Note 3:NewsdayandHoy, New York Charge                        |     
|                                                                                                                          | Note 4: Inventories                                          |     
|                                                                                                                          | Note 5: Goodwill and Other Intangible Assets                 |     
|                                                                                                                          | Note 6: TMCT I and TMCT II                                   |     
|                                                                                                                          | Note 7: Investments                                          |     
|                                                                                                                          | Note 8: Long-Term Debt                                       |     
|                                                                                                                          | Note 9: Contracts Payable for Broadcast Rights               |     
|                                                                                                                          | Note 10: Fair Value of Financial Instruments                 |     
|                                                                                                                          | Note 11: Commitments and Contingencies                       |     
|                                                                                                                          | Note 12: Income Taxes                                        |     
|                                                                                                                          | Note 13: Pension and Postretirement Benefits                 |     
|                                                                                                                          | Note 14: Capital Stock and Share Purchase Plan               |     
|                                                                                                                          | Note 15: Incentive Compensation and Stock Plans              |     
|                                                                                                                          | Note 16: Comprehensive Income                                |     
|                                                                                                                          | Note 17: Business Segments                                   |     
|2005 Quarterly Results                                                                                                    |                                                              | 108 
|2004 Quarterly Results                                                                                                    |                                                              | 109 
|Eleven Year Financial Summary                                                                                             |                                                              | 110 
|Financial Statement Schedule for each of the three fiscal years in the period ended Dec. 25, 2005                         |                                                              |     
|                                                                                                                          | Schedule II Valuation and Qualifying Accounts and Reserves * |     

---

57

---



(This page has been left blank intentionally.)

58

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Shareholders of Tribune Company:

We
have completed integrated audits of Tribune Company's 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 25,
2005, and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits,
are presented below.

Consolidated financial statements and financial statement schedule

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Tribune
Company and its subsidiaries at December 25, 2005 and December 26, 2004, and the results of their operations and their cash flows for each of the three years in the period ended
December 25, 2005 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements
and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it evaluates certain indefinite-lived intangible assets for impairment.

Internal control over financial reporting

Also, in our opinion, management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that the Company
maintained effective internal control over financial reporting as of December 25, 2005 based on criteria established inInternal ControlIntegrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria.
Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 25, 2005, based on criteria established in Internal ControlIntegrated
Frameworkissued by the COSO. The Company's management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's assessment and on the
effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting,
evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinions.

59

---



A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

SIGNATURE

PricewaterhouseCoopers
LLP
Chicago, Illinois
February 21, 2006

60

---



MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS AND
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management's Responsibility for Financial Statements

Management is responsible for the preparation, integrity and fair presentation of the Company's consolidated financial statements and related financial
information included in this Annual Report on Form 10-K to shareholders. The consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America and necessarily include certain amounts that are based on management's best estimates and judgments.

The
system of internal control over financial reporting is periodically assessed for its effectiveness and is augmented by written policies and procedures, the careful selection and
training of qualified personnel and a program of internal audit.

The
consolidated financial statements were audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and their report is shown on pages 59 and 60.
PricewaterhouseCoopers LLP was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors and committees of the
Board. The Company believes that all representations made to the independent accountants during their audits were valid and appropriate.

The
Audit Committee of the Board of Directors is responsible for reviewing and monitoring the Company's financial reporting and accounting practices. The Audit Committee consists of four
independent directors. The Committee meets with representatives of management, the independent registered public accounting firm and internal auditors to discuss financial reporting, accounting and
internal control matters. PricewaterhouseCoopers LLP and the internal auditors have direct access to the Audit Committee.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. As
of Dec. 25, 2005, the Company's management conducted an evaluation of the effectiveness of the design and operation of the Company's internal control over financial reporting based on criteria
established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and
concluded that the Company's internal control over financial reporting was effective as of that date. Our management's assessment of the effectiveness of the Company's internal control over financial
reporting as of Dec. 25, 2005 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

|                                                                     |  |                                                                    
|-------------------------------------------------------------------- |  | -------------------------------------------------------------------
|SIGNATURE                                                            |  | SIGNATURE                                                          
|Dennis J. FitzSimons
Chairman, President and Chief Executive Officer |  | Donald C. Grenesko
Senior Vice President/Finance and
Administration

61

---





(This page has been left blank intentionally.)

62

---



TRIBUNE COMPANY AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF INCOME  (In thousands of dollars, except per share data)

|                                                                                   |                                                                 | Year Ended  |          
|---------------------------------------------------------------------------------- | --------------------------------------------------------------- | ----------- | ---------
|
|Operating Revenues                                                                 |                                                                 |             |          
|                                                                                   | Publishing                                                      |             |          
|                                                                                   |                                                                 | Advertising |          
|                                                                                   |                                                                 | Circulation |          
|                                                                                   |                                                                 | Other       |          
|                                                                                   |                                                                 |             |          
|                                                                                   |                                                                 | Total       |          
|                                                                                   | Broadcasting and entertainment                                  |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total operating revenues                                        |             |          
|Operating Expenses                                                                 |                                                                 |             |          
|                                                                                   | Cost of sales (exclusive of items shown below)                  |             |          
|                                                                                   | Selling, general and administrative                             |             |          
|                                                                                   | Depreciation                                                    |             |          
|                                                                                   | Amortization of intangible assets                               |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total operating expenses                                        |             |          
|                                                                                   |                                                                 |             |          
|Operating Profit                                                                   |                                                                 |             | 1,146,823
|Net income on equity investments                                                   |                                                                 |             | 41,209   
|Interest and dividend income                                                       |                                                                 |             | 7,539    
|Interest expense                                                                   |                                                                 |             | (155,191 
|Gain (loss) on change in fair values of derivatives and related investments        |                                                                 |             | 62,184   
|Loss on early debt retirement                                                      |                                                                 |             |         
|Gain on sales of subsidiaries and investments, net                                 |                                                                 |             | 6,780    
|Loss on investment write-downs                                                     |                                                                 |             |         
|Gain on insurance recoveries                                                       |                                                                 |             |         
|Other non-operating gain (loss), net                                               |                                                                 |             | 897      
|                                                                                   |                                                                 |             |          
|Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle |                                                                 |             | 1,110,241
|Income taxes (Note 12)                                                             |                                                                 |             | (575,552 
|                                                                                   |                                                                 |             |          
|Income Before Cumulative Effect of Change in Accounting Principle                  |                                                                 |             | 534,689  
|Cumulative effect of change in accounting principle, net of tax (Note 1)           |                                                                 |             |         
|                                                                                   |                                                                 |             |          
|Net Income                                                                         |                                                                 |             | 534,689  
|Preferred dividends, net of tax                                                    |                                                                 |             | (8,364   
|                                                                                   |                                                                 |             |          
|Net Income Attributable to Common Shares                                           |                                                                 | $           | 526,325  
|                                                                                   |                                                                 |             |          
|Earnings Per Share (Note 1)                                                        |                                                                 |             |          
|Basic:                                                                             |                                                                 |             |          
|                                                                                   | Before cumulative effect of change in accounting principle      |             | $        
|                                                                                   | Cumulative effect of change in accounting principle, net of tax |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total                                                           |             | $        
|                                                                                   |                                                                 |             |          
|Diluted:                                                                           |                                                                 |             |          
|                                                                                   | Before cumulative effect of change in accounting principle      |             | $        
|                                                                                   | Cumulative effect of change in accounting principle, net of tax |             |          
|                                                                                   |                                                                 |             |          
|                                                                                   | Total                                                           |             | $        
|                                                                                   |                                                                 |             |          

See Notes to Consolidated Financial Statements.

63

---





TRIBUNE COMPANY AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS  (In thousands of dollars, except share data)

|               |                                                                | Dec. 25, 2005 |           | Dec. 26, 2004 |  
|-------------- | -------------------------------------------------------------- | ------------- | --------- | ------------- | -
|Assets         |                                                                |               |           |               |  
|Current Assets |                                                                |               |           |               |  
|               | Cash and cash equivalents                                      |               | $         | 151,110       |  
|               | Accounts receivable (net of allowances of $42,558 and $49,507) |               |           | 798,441       |  
|               | Inventories                                                    |               |           | 44,103        |  
|               | Broadcast rights (net of allowances of $3,000 and $3,000)      |               |           | 308,011       |  
|               | Deferred income taxes                                          |               |           | 114,274       |  
|               | Assets held for sale (Note 2)                                  |               |           | 24,436        |  
|               | Prepaid expenses and other                                     |               |           | 52,458        |  
|               |                                                                |               |           |               |  
|               | Total current assets                                           |               |           | 1,492,833     |  
|               |                                                                |               |           |               |  
|Properties     |                                                                |               |           |               |  
|               | Machinery, equipment and furniture                             |               |           | 2,314,085     |  
|               | Buildings and leasehold improvements                           |               |           | 992,083       |  
|               |                                                                |               |           |               |  
|               |                                                                |               | 3,306,168 |               |  
|               | Accumulated depreciation                                       |               |           | (1,853,914    | )
|               |                                                                |               |           |               |  
|               |                                                                |               | 1,452,254 |               |  
|               | Land                                                           |               |           | 127,167       |  
|               | Construction in progress                                       |               |           | 152,506       |  
|               |                                                                |               |           |               |  
|               | Net properties                                                 |               |           | 1,731,927     |  
|               |                                                                |               |           |               |  
|Other Assets   |                                                                |               |           |               |  
|               | Broadcast rights (net of allowances of $1,004 and $2,226)      |               |           | 361,376       |  
|               | Goodwill                                                       |               |           | 5,947,142     |  
|               | Other intangible assets, net                                   |               |           | 3,087,723     |  
|               | Time Warner stock related to PHONES debt                       |               |           | 282,880       |  
|               | Other investments                                              |               |           | 632,663       |  
|               | Prepaid pension costs                                          |               |           | 871,382       |  
|               | Other                                                          |               |           | 138,316       |  
|               |                                                                |               |           |               |  
|               | Total other assets                                             |               |           | 11,321,482    |  
|               |                                                                |               |           |               |  
|               | Total assets                                                   |               | $         | 14,546,242    |  
|               |                                                                |               |           |               |  

See Notes to Consolidated Financial Statements.

64

---



TRIBUNE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except share data)

|                                                 |                                                                    | Dec. 25, 2005                                                                                                                         |   | Dec. 26, 2004 |       
|------------------------------------------------ | ------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | ------
|Liabilities and Shareholders' Equity             |                                                                    |                                                                                                                                       |   |               |       
|Current Liabilities                              |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Debt due within one year                                           |                                                                                                                                       | $ | 302,460       |       
|                                                 | Accounts payable                                                   |                                                                                                                                       |   | 168,205       |       
|                                                 | Employee compensation and benefits                                 |                                                                                                                                       |   | 244,156       |       
|                                                 | Contracts payable for broadcast rights                             |                                                                                                                                       |   | 329,930       |       
|                                                 | Deferred income                                                    |                                                                                                                                       |   | 101,065       |       
|                                                 | Other                                                              |                                                                                                                                       |   | 300,842       |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Total current liabilities                                          |                                                                                                                                       |   | 1,446,658     |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|Long-Term Debt                                   |                                                                    |                                                                                                                                       |   |               |       
|                                                 | PHONES debt related to Time Warner stock                           |                                                                                                                                       |   | 509,701       |       
|                                                 | Other long-term debt (less portions due within one year)           |                                                                                                                                       |   | 2,449,561     |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Total long-term debt                                               |                                                                                                                                       |   | 2,959,262     |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|Other Non-Current Liabilities                    |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Deferred income taxes                                              |                                                                                                                                       |   | 2,352,633     |       
|                                                 | Contracts payable for broadcast rights                             |                                                                                                                                       |   | 528,878       |       
|                                                 | Deferred compensation and benefits                                 |                                                                                                                                       |   | 356,612       |       
|                                                 | Other obligations                                                  |                                                                                                                                       |   | 176,648       |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Total other non-current liabilities                                |                                                                                                                                       |   | 3,414,771     |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|Commitments and Contingent Liabilities (Note 11) |                                                                    |                                                                                                                                       |  |               |       
|Shareholders' Equity                             |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Series C convertible preferred stock                               |                                                                                                                                       |   |               |       
|                                                 |                                                                    | Authorized: 823,568 shares; Issued and outstanding: 88,519 shares (net of 354,077 treasury shares) (liquidation value $500 per share) |   |               | 44,260
|                                                 | Series D-1 convertible preferred stock                             |                                                                                                                                       |   |               |       
|                                                 |                                                                    | Authorized: 380,972 shares; Issued and outstanding: 76,194 shares (net of 304,778 treasury shares) (liquidation value $500 per share) |   |               | 38,097
|                                                 | Series D-2 convertible preferred stock                             |                                                                                                                                       |   |               |       
|                                                 |                                                                    | Authorized: 245,100 shares; Issued and outstanding: 49,020 shares (net of 196,080 treasury shares) (liquidation value $500 per share) |   |               | 24,510
|                                                 | Common stock ($0.01 par value)                                     |                                                                                                                                       |   |               |       
|                                                 |                                                                    | Authorized: 1,400,000,000 shares; 390,122,184 shares outstanding at Dec. 25, 2005 and 400,514,576 shares outstanding at Dec. 26, 2004 |   |               | 2,270 
|                                                 | Additional paid-in capital                                         |                                                                                                                                       |   | 6,818,533     |       
|                                                 | Retained earnings                                                  |                                                                                                                                       |   | 2,824,762     |       
|                                                 | Treasury common stock (at cost) 83,441,765 shares in 2005 and 2004 |                                                                                                                                       |   | (3,015,581    | )     
|                                                 | Accumulated other comprehensive income (loss)                      |                                                                                                                                       |   | (11,300       | )     
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Total shareholders' equity                                         |                                                                                                                                       |   | 6,725,551     |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       
|                                                 | Total liabilities and shareholders' equity                         |                                                                                                                                       | $ | 14,546,242    |       
|                                                 |                                                                    |                                                                                                                                       |   |               |       

See Notes to Consolidated Financial Statements.

65

---





TRIBUNE COMPANY AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY  (In thousands, except per share data)

|                                                 |                                       |                                                         |           |          |         | Accumulated
Other
Comprehensive
Income (Loss) |          | Convertible Preferred Stock
|------------------------------------------------ | ------------------------------------- | ------------------------------------------------------- | --------- | -------- | ------- | --------------------------------------------- | -------- | ---------------------------
|
|
|Balance at Dec. 29, 2002                         |                                       | $                                                       | 6,119,235 |          | $       | 4,516,291                                     |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Net income                            |                                                         |           | 891,379  |         |                                               | 891,379  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                               |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | 7,557   |                                               |          |                           
|                                                 |                                       | Change in minimum pension liabilities, net              |           |          | (1,753  | )                                             |          |                           
|                                                 |                                       | Change in foreign currency translation adjustments, net |           |          | 106     |                                               |          |                           
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Comprehensive income                             |                                       |                                                         | 897,289   |          |         |                                              |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Common ($.44 per share)               |                                                         |           | (136,601 | )       |                                               | (136,601 | )                          
|                                                 | Series B preferred ($17.05 per share) |                                                         |           | (16,683  | )       |                                               | (16,683  | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,252   | )       |                                               | (8,252   | )                          
|Tax benefit on dividends paid to the ESOP(2)     |                                       |                                                         | 494       |          |         | 494                                           |          |                            
|Redemptions of convertible preferred stock       |                                       |                                                         |          |          |         |                                              |          |                            
|Conversions of LYONs debt securities             |                                       |                                                         | 277,740   |          |         |                                              |          |                            
|Shares issued under option and stock plans       |                                       |                                                         | 330,101   |          |         |                                              |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 52,723    |          |         |                                              |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (163,178  | )        |         |                                              |          |                            
|Purchases of treasury stock                      |                                       |                                                         | (358,516  | )        |         |                                              |          |                            
|Retirement of treasury stock                     |                                       |                                                         |          |          |         | (2,238,168                                    | )        |                            
|Repayment of ESOP debt                           |                                       |                                                         | 33,772    |          |         |                                              |          |                            
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Balance at Dec. 28, 2003                         |                                       | $                                                       | 7,028,124 |          | $       | 3,008,460                                     |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Net income                            |                                                         |           | 555,536  |         |                                               | 555,536  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                               |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | 896     |                                               |          |                           
|                                                 |                                       | Change in minimum pension liabilities, net              |           |          | (1,700  | )                                             |          |                           
|                                                 |                                       | Change in foreign currency translation adjustments, net |           |          | 118     |                                               |          |                           
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Comprehensive income                             |                                       |                                                         | 554,850   |          |         |                                              |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Common ($.48 per share)               |                                                         |           | (154,702 | )       |                                               | (154,702 | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,308   | )       |                                               | (8,308   | )                          
|Shares issued under option and stock plans       |                                       |                                                         | 242,620   |          |         |                                              |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 32,819    |          |         |                                              |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (124,473  | )        |         | (51,879                                       | )        |                            
|Purchases of treasury stock                      |                                       |                                                         | (734,086  | )        |         |                                              |          |                            
|Retirement of treasury stock                     |                                       |                                                         |          |          |         | (538,565                                      | )        |                            
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Balance at Dec. 26, 2004                         |                                       | $                                                       | 6,836,844 |          | $       | 2,810,542                                     |          | $                          
|Comprehensive income:                            |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Net income                            |                                                         |           | 534,689  |         |                                               | 534,689  |                            
|                                                 | Other comprehensive income:           |                                                         |           |          |         |                                               |          |                            
|                                                 |                                       | Change in unrealized gain on securities, net            |           |          | (3,463  | )                                             |          |                           
|                                                 |                                       | Change in minimum pension liabilities, net              |           |          | (20,597 | )                                             |          |                           
|                                                 |                                       | Change in foreign currency translation adjustments, net |           |          | (70     | )                                             |          |                           
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Comprehensive income                             |                                       |                                                         | 510,559   |          |         |                                              |          |                            
|Dividends declared:                              |                                       |                                                         |           |          |         |                                               |          |                            
|                                                 | Common ($.72 per share)               |                                                         |           | (225,110 | )       |                                               | (225,110 | )                          
|                                                 | Series C, D-1 and D-2 preferred       |                                                         |           | (8,364   | )       |                                               | (8,364   | )                          
|Shares issued under option and stock plans       |                                       |                                                         | 51,102    |          |         |                                              |          |                            
|Tax benefit on stock options exercised           |                                       |                                                         | 5,395     |          |         |                                              |          |                            
|Shares tendered as payment for options exercised |                                       |                                                         | (1,101    | )        |         | (769                                          | )        |                            
|Purchases of treasury stock                      |                                       |                                                         | (443,774  | )        |         |                                              |          |                            
|Retirement of treasury stock                     |                                       |                                                         |          |          |         | (286,226                                      | )        |                            
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            
|Balance at Dec. 25, 2005                         |                                       | $                                                       | 6,725,551 |          | $       | 2,824,762                                     |          | $                          
|                                                 |                                       |                                                         |           |          |         |                                               |          |                            

---

See Notes to Consolidated Financial Statements.

66

---



| | Common Stock and
Additional Paid-In Capital |            | Treasury Common Stock |          | Treasury Common
Stock Held by
Tribune Stock
Compensation Fund |   |            |  
| | ------------------------------------------- | ---------- | --------------------- | -------- | ------------------------------------------------------------- | - | ---------- | -
|
| | $                                           | 8,342,505  |                       | 536,887  |                                                               | $ | (7,047,670 | )
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             | (179,778   | )                     |         |                                                               |   | 407,186    |  
| |                                             | 117,565    |                       |         |                                                               |   | 160,175    |  
| |                                             | 93,073     |                       | 39       |                                                               |   | 209,979    |  
| |                                             | 52,723     |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   | (156,623   | )
| |                                             |           |                       |         |                                                               |   | (338,022   | )
| |                                             | (1,501,604 | )                     | (124,556 | )                                                             |   | 3,739,772  |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| | $                                           | 6,924,484  |                       | 412,370  |                                                               | $ | (3,025,203 | )
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             | 167,563    |                       | 5,006    |                                                               |   | 75,057     |  
| |                                             | 32,819     |                       |         |                                                               |   |           |  
| |                                             | (13,309    | )                     | (1,335   | )                                                             |   | (59,285    | )
| |                                             |           |                       |         |                                                               |   | (734,086   | )
| |                                             | (193,052   | )                     | (15,526  | )                                                             |   | 731,617    |  
| |                                             |            |                       |          |                                                               |   |            |  
| | $                                           | 6,918,505  |                       | 400,515  |                                                               | $ | (3,011,900 | )
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |            |                       |          |                                                               |   |            |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             |           |                       |         |                                                               |   |           |  
| |                                             | 51,102     |                       | 1,814    |                                                               |   |           |  
| |                                             | 5,395      |                       |         |                                                               |   |           |  
| |                                             | (332       | )                     | (26      | )                                                             |   |           |  
| |                                             |           |                       |         |                                                               |   | (443,774   | )
| |                                             | (153,867   | )                     | (12,181  | )                                                             |   | 440,093    |  
| |                                             |            |                       |          |                                                               |   |            |  
| | $                                           | 6,820,803  |                       | 390,122  |                                                               | $ | (3,015,581 | )
| |                                             |            |                       |          |                                                               |   |            |  

67

---





TRIBUNE COMPANY AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands of dollars)

|                                                                        |                                                                                        | Year Ended                                                                                    |         
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | --------
|
|Operations                                                              |                                                                                        |                                                                                               |         
|Net income                                                              |                                                                                        | $                                                                                             | 534,689 
|Adjustments to reconcile net income to net cash provided by operations: |                                                                                        |                                                                                               |         
|                                                                        | (Gain) loss on change in fair values of derivatives and related investments            |                                                                                               |         
|                                                                        | Loss on early debt retirement                                                          |                                                                                               |         
|                                                                        | Gain on sales of subsidiaries and investments, net                                     |                                                                                               |         
|                                                                        | Investment write-downs                                                                 |                                                                                               |         
|                                                                        | Gain on insurance recoveries                                                           |                                                                                               |         
|                                                                        | Other non-operating (gain) loss, net                                                   |                                                                                               |         
|                                                                        | Cumulative effect of change in accounting principle, net of tax                        |                                                                                               |         
|                                                                        | Depreciation                                                                           |                                                                                               |         
|                                                                        | Amortization of intangible assets                                                      |                                                                                               |         
|                                                                        | Net income on equity investments                                                       |                                                                                               |         
|                                                                        | Deferred income taxes                                                                  |                                                                                               |         
|                                                                        | Tax benefit on stock options exercised                                                 |                                                                                               |         
|                                                                        | Changes in working capital items excluding effects from acquisitions and dispositions: |                                                                                               |         
|                                                                        |                                                                                        | Accounts receivable                                                                           |         
|                                                                        |                                                                                        | Inventories, prepaid expenses and other current assets                                        |         
|                                                                        |                                                                                        | Accounts payable, employee compensation and benefits, deferred income and accrued liabilities |         
|                                                                        |                                                                                        | Income taxes                                                                                  |         
|                                                                        | Change in broadcast rights, net of liabilities                                         |                                                                                               |         
|                                                                        | Change in prepaid pension costs                                                        |                                                                                               |         
|                                                                        | Change in Matthew Bender and Mosby tax reserve                                         |                                                                                               |         
|                                                                        | Other, net                                                                             |                                                                                               |         
|                                                                        |                                                                                        |                                                                                               |         
|Net cash provided by operations                                         |                                                                                        |                                                                                               | 659,353 
|                                                                        |                                                                                        |                                                                                               |         
|Investments                                                             |                                                                                        |                                                                                               |         
|Capital expenditures                                                    |                                                                                        |                                                                                               | (205,945
|Acquisitions                                                            |                                                                                        |                                                                                               | (4,207  
|Investments                                                             |                                                                                        |                                                                                               | (78,071 
|Matthew Bender and Mosby tax liability allocated to goodwill (Note 12)  |                                                                                        |                                                                                               | (459,116
|Proceeds from sales of subsidiaries and investments                     |                                                                                        |                                                                                               | 22,534  
|                                                                        |                                                                                        |                                                                                               |         
|Net cash used for investments                                           |                                                                                        |                                                                                               | (724,805
|                                                                        |                                                                                        |                                                                                               |         
|Financing                                                               |                                                                                        |                                                                                               |         
|Issuance of commercial paper, net                                       |                                                                                        |                                                                                               | 150,326 
|Premium on early debt retirement                                        |                                                                                        |                                                                                               |        
|Repayments of long-term debt                                            |                                                                                        |                                                                                               | (198,880
|Issuance of long-term debt                                              |                                                                                        |                                                                                               | 777,660 
|Long-term debt issuance costs                                           |                                                                                        |                                                                                               | (4,762  
|Sales of common stock to employees, net                                 |                                                                                        |                                                                                               | 41,374  
|Purchases of treasury common stock by Tribune Stock Compensation Fund   |                                                                                        |                                                                                               |        
|Other purchases of Tribune common stock                                 |                                                                                        |                                                                                               | (440,093
|Dividends                                                               |                                                                                        |                                                                                               | (233,474
|                                                                        |                                                                                        |                                                                                               |         
|Net cash provided by (used for) financing                               |                                                                                        |                                                                                               | 92,151  
|                                                                        |                                                                                        |                                                                                               |         
|Net Increase (Decrease) in Cash and Cash Equivalents                    |                                                                                        |                                                                                               | 26,699  
|Cash and cash equivalents, beginning of year                            |                                                                                        |                                                                                               | 124,411 
|                                                                        |                                                                                        |                                                                                               |         
|Cash and cash equivalents, end of year                                  |                                                                                        | $                                                                                             | 151,110 
|                                                                        |                                                                                        |                                                                                               |         

See Notes to Consolidated Financial Statements.

68

---



TRIBUNE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of Tribune Company and subsidiaries (the "Company"), as summarized below, conform with accounting principles generally
accepted in the United States of America and reflect practices appropriate to the Company's businesses.

Nature of OperationsThe Company is a media and entertainment company. Through its subsidiaries, the Company is engaged in newspaper
publishing, television and radio broadcasting and entertainment.

Fiscal YearThe Company's fiscal year ends on the last Sunday in December. Fiscal years 2005, 2004 and 2003 each comprised 52 weeks.

Principles of ConsolidationThe consolidated financial statements include the accounts of Tribune Company and all majority-owned
subsidiaries. In general, investments comprising 20 to 50 percent of the voting stock of companies and certain partnership interests are accounted for using the equity method. All other
investments are generally accounted for using the cost method. All significant intercompany transactions are eliminated.

The
Company evaluates its investments and other transactions for consolidation under the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 46,
"Consolidation of Variable Interest Entities" ("FIN 46"), issued in January 2003. The Company holds significant variable interests, as defined by FIN 46, in CareerBuilder, LLC,
Classified Ventures, LLC, ShopLocal, LLC (formerly CrossMedia Services, Inc.) and Topix, LLC, but the Company has determined that it is not the primary beneficiary of these entities. The
Company's maximum loss exposure related to these entities is limited to its equity investments in CareerBuilder, LLC, Classified Ventures, LLC, ShopLocal, LLC (formerly
CrossMedia Services, Inc.) and Topix, LLC, which were $81 million, $42 million, $25 million and $15 million, respectively, at Dec. 25, 2005. At
Dec. 26, 2004, the Company's equity investments in CareerBuilder, LLC, Classified Ventures, LLC and ShopLocal, LLC (formerly CrossMedia Services, Inc.) were $81 million,
$8 million and $24 million, respectively.

PresentationCertain prior year financial information has been reclassified to conform to the current year presentation.

Revenue RecognitionThe Company's primary sources of revenue are from the sales of advertising space in published issues of its newspapers
and on interactive websites owned by, or affiliated with, the Company; distribution of preprinted advertising inserts in its newspapers; sales of newspapers to distributors and individual subscribers;
and sales of airtime on its television and radio stations. Newspaper advertising revenue is recorded, net of agency commissions, when advertisements are published in newspapers. Website advertising
revenue is recognized ratably over the contract period or as services are delivered, as appropriate. Proceeds from subscriptions are deferred and are included in revenue on a pro-rata
basis over the term of the subscriptions. Broadcast revenue is recorded, net of agency commissions, when commercials are aired. The Company records rebates when earned as a reduction of advertising
revenue.

Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

69

---



Cash and Cash EquivalentsCash and cash equivalents are stated at cost, which approximates market value. Investments with original
maturities of three months or less at the time of purchase are considered to be cash equivalents.

Accounts ReceivableThe Company's accounts receivable are primarily due from advertisers. Credit is extended based on an evaluation of each
customer's financial condition, and generally collateral is not required. The Company maintains an allowance for uncollectible accounts, rebates and volume discounts. This allowance is determined
based on historical write-off experience and any known specific collectibility exposures.

InventoriesInventories are stated at the lower of cost or market. Cost is determined on the last-in, first-out
("LIFO") basis for newsprint and on the first-in, first-out ("FIFO") basis for all other inventories.

Broadcast RightsBroadcast rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at
the lower of cost or estimated net realizable value. The total cost of these rights is recorded as an asset and a liability when the program becomes available for broadcast. Syndicated program rights
that have limited showings are generally amortized using an accelerated method as programs are aired. Sports and feature film rights are amortized using the straight-line method. The
current portion of broadcast rights represents those rights available for broadcast that are expected to be amortized in the succeeding year.

The
Company maintains an allowance for programming that is not expected to be aired by the end of the contract period. This allowance for excess programming inventory is based on a
program-by-program review of the Company's five-year broadcast plans and historical write-off trends. The total reserve balance at Dec. 25, 2005
and Dec. 26, 2004 was $4 million and $5 million, respectively. Actual write-offs in 2005 and 2004 were $1 million and $12 million, respectively. Future
write-offs can vary based on changes in consumer viewing trends and the availability and costs of other programming.

PropertiesProperty, plant and equipment are stated at cost. The Company capitalizes major property, plant and equipment additions,
improvements and replacements, as well as interest incurred during construction of major facilities and equipment. Depreciation is computed using the straight-line method over the
following estimated useful lives: 10 to 40 years for buildings, 7 to 20 years for newspaper printing presses and 3 to 10 years for all other equipment. Expenditures for repairs
and maintenance of existing assets are charged to expense as incurred.

Goodwill and Other Intangible AssetsGoodwill and other intangible assets are summarized in Note 5. The Company periodically reviews
goodwill and certain intangible assets no longer being amortized for impairment in accordance with Financial Accounting Standard ("FAS") No. 142, "Goodwill and Other Intangible Assets." Under
FAS No. 142, the impairment review of goodwill and other intangible assets not subject to amortization must be based generally on fair values.

The
estimated fair value of the reporting units to which goodwill is allocated is determined using multiples of operating cash flows for purposes of analyzing goodwill for impairment.
The estimated fair values of other assets subject to the annual impairment review, which include newspaper mastheads and FCC licenses, are calculated based on projected future discounted cash flow
analyses. The development of market multiples and cash flow projections used in the analyses requires the use of assumptions, including assumptions regarding revenue and market growth. The analyses
use discount rates based on specific economic factors in the publishing and broadcasting industries. These assumptions reflect the

70

---



Company's
best estimates, but these items involve inherent uncertainties based on market conditions generally outside of the Company's control.

In
the fourth quarter of 2004, the Company elected to early adopt the provisions of the FASB's Emerging Issues Task Force Topic No. D-108, which requires the use of a
direct valuation method for valuing intangible assets, such as FCC licenses, and reviewing them for impairment. Historically, the Company had been using a residual valuation method to review its FCC
licenses for impairment each year. A direct valuation method generally results in a lower valuation than does a residual valuation method. The Company performed an impairment review of its FCC
licenses for the years ended Dec. 28, 2003 using a residual method. No impairments were required as a result of the analyses performed in 2003. The effect of changing to a direct valuation
method for the 2004 FCC licenses impairment review was a pretax charge of $29 million ($18 million after-tax). The charge was recorded in the fourth quarter of 2004 as a
cumulative effect of a change in accounting principle in the consolidated statements of income.

Upon
the adoption of FAS No. 142 at the beginning of fiscal 2002, the Company treated the intangible assets associated with network affiliation agreements as having indefinite
lives and stopped recording amortization expense on these assets. In December 2003, the staff of the Securities and Exchange Commission provided guidance regarding their accounting position in
this area indicating that network affiliation agreements should be amortized. As a result, the Company began amortizing these assets in the fourth quarter of 2003 using a 40-year life. The
Company believes the 40-year life is representative of the remaining expected useful life of the network affiliation intangibles. The provisions of FAS No. 142 required the Company
to perform an impairment analysis at the time of a change in the estimated useful life of an intangible asset which was previously not being amortized. No adjustment to the network affiliation
intangible assets was required as a result of this impairment review performed in the fourth quarter of 2003. Beginning in 2004, the Company no longer performs an annual test of the impairment of its
network affiliation agreements under FAS No. 142, but will perform an impairment test if indicators of impairment are present, as required by FAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."

InvestmentsThe Company records its investments in debt and equity securities at fair value, except for debt securities that the Company
intends to hold to maturity and equity securities that are accounted for under the equity method or that are issued by private companies. Except for 16 million Time Warner shares (see
"Derivative Instruments" below), investments are currently classified as available-for-sale, and accordingly, the difference between cost and fair value, net of related tax
effects, is recorded in the accumulated other comprehensive income component of shareholders' equity.

Derivative InstrumentsFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," requires all derivative
instruments to be recorded in the balance sheet at fair value. Changes in the fair value of derivative instruments are recognized periodically in income. The provisions of FAS No. 133 affect
the Company's accounting for its 8 million Exchangeable Subordinated Debentures due 2029 ("PHONES") (see Note 8) and its interest rate swap related to its $100 million 7.5%
debentures (see Note 8).

Under
the provisions of FAS No. 133, the initial value of the PHONES was split into a debt component and a derivative component. Changes in the fair value of the derivative
component of the PHONES are recorded in the statement of income. Beginning in the second quarter of 1999, changes in the fair value of the related 16 million Time Warner shares are also
recorded in the statement of income and should at least partially offset changes in the fair value of the derivative component of the PHONES. However, there have been, and may continue to be, periods
with significant non-cash

71

---



increases
or decreases to the Company's net income pertaining to the PHONES and the related Time Warner shares.

The
carrying values of the Company's derivative instruments approximate fair value. The fair values of the PHONES were determined by reference to market values resulting from trading on
a national securities exchange.

The
Company's interest rate swap is a fair value hedge and is used to manage exposure to market risk associated with changes in interest rates. The changes in fair value of the swap
agreement and the related debt instrument are recorded in income. Changes in the fair value of the swap agreement offset changes in the fair value of the related debt (see Note 8).

Pension PlansRetirement benefits are provided to employees through pension plans sponsored either by the Company or by unions. Under the
Company-sponsored plans, pension benefits are primarily a function of both the years of service and the level of compensation for a specified number of years, depending on the plan. It is the
Company's policy to fund the minimum for Company-sponsored pension plans as required by ERISA. Contributions made to union-sponsored plans are based upon collective bargaining agreements. Additional
information is provided in Note 13.

Postretirement Benefits Other than PensionsThe Company provides certain health care and life insurance benefits for retired employees. The
expected cost of providing these benefits is accrued over the years that the employees render services. It is the Company's policy to fund postretirement benefits as claims are incurred. Additional
information is provided in Note 13.

Self-InsuranceThe Company self-insures for certain employee medical and disability income benefits, workers'
compensation costs and automobile and general liability claims. The recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. The recorded
liabilities for self-insured risks totaled $113 million and $106 million at Dec. 25, 2005 and Dec. 26, 2004, respectively.

Deferred IncomeDeferred income arises in the normal course of business from advance subscription payments for newspapers, interactive
advertising sales and prepaid ticket revenue related to the Chicago Cubs. Deferred income is recognized in the period it is earned.

Stock-Based CompensationThe Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board ("APB")
Opinion No. 25 and related interpretations. Under APB No. 25, no compensation expense is recorded because the exercise price of employee stock options equals the market price of
the underlying stock on the date of grant.

On
June 24, 2005, the Company accelerated the vesting of certain stock options granted on Feb. 11, 2003 and Feb. 10, 2004, totaling 2.4 million in each year.
Unvested stock options awarded to the then current executive officers of the Company on these grant dates, which aggregated 0.8 million and 0.6 million, respectively, were not
accelerated at that time. On Dec. 16, 2005, the Company accelerated the vesting of all stock options granted on Feb. 8, 2005, totaling 3.5 million. Also on Dec. 16, 2005,
the Company accelerated the remaining unvested stock options granted to the then current executive officers of the Company on Feb. 11, 2003 and Feb. 10, 2004, totaling 0.4 million
in both years. All other terms and conditions of the stock option grants remain unchanged.

In
accordance with APB No. 25 and related interpretations, the acceleration of vesting of these stock options did not require accounting recognition in the Company's income
statement. The exercise prices of the 2003, 2004 and 2005 grants were $45.90, $52.05 and $40.59, respectively, and the

72

---



Company's
closing stock prices on the June 24, 2005 and Dec. 16, 2005 dates of acceleration were $35.64 and $30.80, respectively. The impact of the accelerated vesting was to increase
pro forma stock-based compensation by $82 million, or $50 million net of tax, in 2005.

The
accelerated vesting of these stock options was one of several actions the Company has recently taken to reduce stock-based compensation expense that will be recorded in future years
with the adoption of Financial Accounting Standard ("FAS") No. 123R (see "New Accounting Standards" discussion below). Over the last two years, the Company has reduced the number of stock
options granted by approximately 45%. Also, beginning in 2004, option grants have 8-year terms, down from 10 years for grants in previous years, and do not have a replacement option feature.

Under
FAS No. 123, "Accounting for Stock-Based Compensation," as amended by FAS No. 148, compensation cost is measured at the grant date based on the estimated fair value
of the award and is recognized as compensation expense over the vesting period. Had compensation cost for the Company's stock-based compensation plans been determined consistent with FAS
No. 123, the Company's full year net income and EPS would have been reduced to the following pro forma amounts (in thousands, except per share data):

|                                                                       |             | Dec. 25, 2005                         |         | Dec. 26, 2004 |         | Dec. 28, 2003 |     
|---------------------------------------------------------------------- | ----------- | ------------------------------------- | ------- | ------------- | ------- | ------------- | ----
|Net income, as reported                                                |             | $                                     | 534,689 |               | $       | 555,536       |     
|Less: Pro forma stock-based employee compensation expense, net of tax: |             |                                       |         |               |         |               |     
|                                                                       |             | General options                       |         |               | (89,508 | )             |     
|                                                                       |             | Replacement options                   |         |               | (1,242  | )             |     
|                                                                       |             | Merit options                         |         |               |        |               |     
|                                                                       |             | Employee Stock Purchase Plan ("ESPP") |         |               | (3,361  | )             |     
|                                                                       |             |                                       |         |               |         |               |     
|Total                                                                  |             |                                       | (94,111 | )             |         | (70,940       | )   
|                                                                       |             |                                       |         |               |         |               |     
|Pro forma net income                                                   |             |                                       | 440,578 |               |         | 484,596       |     
|Preferred dividends, net of tax                                        |             |                                       | (8,364  | )             |         | (8,308        | )   
|                                                                       |             |                                       |         |               |         |               |     
|Pro forma net income attributable to common shares                     |             | $                                     | 432,214 |               | $       | 476,288       |     
|                                                                       |             |                                       |         |               |         |               |     
|Weighted average common shares outstanding                             |             |                                       | 312,880 |               |         | 322,420       |     
|Basic EPS:                                                             |             |                                       |         |               |         |               |     
|                                                                       | As reported |                                       | $       | 1.68          |         | $             | 1.70
|                                                                       | Pro forma   |                                       | $       | 1.38          |         | $             | 1.48
|Adjusted weighted average common shares outstanding                    |             |                                       | 315,338 |               |         | 327,237       |     
|Diluted EPS:                                                           |             |                                       |         |               |         |               |     
|                                                                       | As reported |                                       | $       | 1.67          |         | $             | 1.67
|                                                                       | Pro forma   |                                       | $       | 1.37          |         | $             | 1.46

73

---



In determining the pro forma compensation cost under the fair value method of FAS No. 123, using the Black-Scholes option pricing model, the following
weighted average assumptions were used for general awards and replacement options:

|                                |  | 2005 |       | 2004 |   | 2003 |  
|------------------------------- |  | ---- | ----- | ---- | - | ---- | -
|
|Risk-free interest rate         |  |      | 3.7   | %    |   | 3.3  | %
|Expected dividend yield         |  |      | 1.8   | %    |   | 1.8  | %
|Expected stock price volatility |  |      | 28.1  | %    |   | 22.8 | %
|Expected life (in years)        |  |      | 5     |      |   | 3    |  
|Weighted average fair value     |  | $    | 10.49 |      | $ | 6.96 |  

Income TaxesProvisions for federal and state income taxes are calculated on reported pretax earnings based on current tax laws and also
include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Taxable income reported to the taxing
jurisdictions in which the Company operates often differs from pretax earnings because some items of income and expense are recognized in different time periods for income tax purposes. The Company
provides deferred taxes on these temporary differences in accordance with FAS No. 109, "Accounting for Income Taxes." Taxable income also may differ from pretax earnings due to statutory
provisions under which specific revenues are exempt from taxation and specific expenses are not allowable as deductions. The Company establishes reserves for income tax when it is probable that one or
more of the taxing authorities will challenge and disallow a position taken by the Company in its income tax returns and the resulting liability is estimable. The consolidated tax provision and
related accruals include estimates of the potential taxes and related interest as deemed appropriate. These estimates are reevaluated and adjusted, if appropriate, on a quarterly basis. Although
management believes its estimates and judgments are reasonable, the
resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by the Company.

Comprehensive IncomeComprehensive income consists of net income and other gains and losses affecting shareholders' equity that, under
accounting principles generally accepted in the United States of America, are excluded from net income. Other comprehensive income (loss) primarily includes gains and losses on marketable securities
classified as available-for-sale and changes in minimum pension liabilities. The Company's comprehensive income (loss) is summarized in Note 16.

New Accounting StandardsIn December 2004, the FASB issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes
APB No. 25, FAS No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated
fair value of the award and is required to be recognized as compensation expense over the vesting period. The Company plans to adopt FAS No. 123R in the first quarter of 2006 using the modified
prospective application, which requires the recognition of share-based compensation costs as if the provisions of the standard had been in effect since Dec. 25, 1994 (the beginning of the
Company's 1995 fiscal year). The Company expects to record approximately $33 million of pretax compensation expense in 2006 related to equity grants in 2006 and prior years, as well as the
Company's ESPP.

Earnings Per Share ("EPS")Basic EPS is computed by dividing net income attributable to common shares by the weighted average number of
common shares outstanding during the period. Diluted EPS

74

---



for
the year ended Dec. 28, 2003 was computed assuming that the Series B convertible preferred shares held by the Company's Employee Stock Ownership Plan ("ESOP") and the Liquid Yield
Option Notes ("LYONs") debt securities had been converted into common shares as of the beginning of fiscal year 2003. The Series B convertible preferred shares were converted into approximately
15.4 million shares of common stock on Dec. 16, 2003, and the LYONs were converted into approximately 7.0 million shares of common stock during June 2003. Therefore,
weighted average converted shares for the Series B preferred stock and LYONs were used in the 2003 calculation. In addition, weighted average common shares outstanding were adjusted for the
dilutive effect of stock options. The Company's stock options and convertible securities are included in the calculation of diluted EPS only when their effects are dilutive. In the 2005, 2004 and 2003
calculations of diluted EPS, 2.9 million, 2.3 million and 2.3 million shares, respectively, of the Company's Series C, D-1 and D-2 convertible
preferred stocks, and 35.5 million, 10.6 million and 3.2 million shares, respectively, of the Company's outstanding options, were not reflected because their effects were
antidilutive.

75

---



The
computations of basic and diluted EPS were as follows (in thousands, except per share data):

|                                                                                                    |  | 2005 |         | 2004 |   | 2003    |  
|--------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Basic EPS                                                                                           |  |      |         |      |   |         |  
|Income before cumulative effect of change in accounting principle                                   |  | $    | 534,689 |      | $ | 573,324 |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      |        |      |   | (17,788 | )
|                                                                                                    |  |      |         |      |   |         |  
|Net income                                                                                          |  | $    | 534,689 |      | $ | 555,536 |  
|Preferred dividends, net of tax                                                                     |  |      | (8,364  | )    |   | (8,308  | )
|                                                                                                    |  |      |         |      |   |         |  
|Net income attributable to common shares                                                            |  | $    | 526,325 |      | $ | 547,228 |  
|Weighted average common shares outstanding                                                          |  |      | 312,880 |      |   | 322,420 |  
|                                                                                                    |  |      |         |      |   |         |  
|Basic EPS:                                                                                          |  |      |         |      |   |         |  
|Before cumulative effect of change in accounting principle                                          |  | $    | 1.68    |      | $ | 1.75    |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      |        |      |   | (.05    | )
|                                                                                                    |  |      |         |      |   |         |  
|Total                                                                                               |  | $    | 1.68    |      | $ | 1.70    |  
|                                                                                                    |  |      |         |      |   |         |  
|Diluted EPS                                                                                         |  |      |         |      |   |         |  
|Income before cumulative effect of change in accounting principle                                   |  | $    | 534,689 |      | $ | 573,324 |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      |        |      |   | (17,788 | )
|                                                                                                    |  |      |         |      |   |         |  
|Net income                                                                                          |  | $    | 534,689 |      | $ | 555,536 |  
|Additional ESOP contribution required assuming Series B preferred shares were converted, net of tax |  |      |        |      |   |        |  
|Dividends on Series C, D-1 and D-2 preferred stock                                                  |  |      | (8,364  | )    |   | (8,308  | )
|LYONs interest expense, net of tax                                                                  |  |      |        |      |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Adjusted net income                                                                                 |  | $    | 526,325 |      | $ | 547,228 |  
|                                                                                                    |  |      |         |      |   |         |  
|Weighted average common shares outstanding                                                          |  |      | 312,880 |      |   | 322,420 |  
|Assumed conversion of Series B preferred shares into common shares                                  |  |      |        |      |   |        |  
|Assumed exercise of stock options, net of common shares assumed repurchased with the proceeds       |  |      | 2,458   |      |   | 4,817   |  
|Assumed conversion of LYONs debt securities                                                         |  |      |        |      |   |        |  
|                                                                                                    |  |      |         |      |   |         |  
|Adjusted weighted average common shares outstanding                                                 |  |      | 315,338 |      |   | 327,237 |  
|                                                                                                    |  |      |         |      |   |         |  
|Diluted EPS:                                                                                        |  |      |         |      |   |         |  
|Before cumulative effect of change in accounting principle                                          |  | $    | 1.67    |      | $ | 1.72    |  
|Cumulative effect of change in accounting principle, net of tax                                     |  |      |        |      |   | (.05    | )
|                                                                                                    |  |      |         |      |   |         |  
|Total                                                                                               |  | $    | 1.67    |      | $ | 1.67    |  
|                                                                                                    |  |      |         |      |   |         |  

76

---





NOTE 2: CHANGES IN OPERATIONS AND NON-OPERATING ITEMS

AcquisitionsThe Company had no significant acquisitions in 2005 and 2004. The Company completed acquisitions totaling approximately
$275 million in 2003 for cash and other consideration, including the value of the Denver radio station group assets that were divested in an exchange transaction during 2003. The results of the
acquired companies are included in the consolidated statements of income since their respective dates of acquisition. None of these acquisitions were material in relation to the Company's consolidated
financial statements.

On
March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Ore., from ACME Communications for a
total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a
like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an
estimated fair market value of $55 million, plus $20 million in cash. The Company allocated $153 million, $42 million and $136 million of the purchase price to FCC
licenses, network affiliations and goodwill, respectively.

Supplemental Cash Flow InformationInformation for acquisitions made in 2005, 2004 and 2003 is summarized in the table below (in thousands):

|                                                      |  | 2005 |       | 2004 |   | 2003 |  
|----------------------------------------------------- |  | ---- | ----- | ---- | - | ---- | -
|Fair value of assets acquired(1)                      |  | $    | 4,207 |      | $ | 854  |  
|Fair value of assets disposed in exchange transaction |  |      |      |      |   |     |  
|Liabilities assumed                                   |  |      |      |      |   | (303 | )
|                                                      |  |      |       |      |   |      |  
|Net cash paid                                         |  | $    | 4,207 |      | $ | 551  |  
|                                                      |  |      |       |      |   |      |  

---

Cash paid for interest and income taxes in 2005, 2004 and 2003 is summarized below (in thousands):

|                |  | 2005 |           | 2004 |   | 2003   
|--------------- |  | ---- | --------- | ---- | - | -------
|Interest        |  | $    | 134,955   |      | $ | 138,392
|Income taxes(1) |  | $    | 1,157,243 |      | $ | 286,129

---

On May 22, 2003, the Company issued a notice to the holders of the LYONs that the Company would redeem this debt issue on June 23,
2003. All of the LYONs holders converted their notes, which had a recorded value of $278 million, into approximately 7 million shares of common stock prior to the redemption date.

Consolidation of Los Angeles Times' Production Operations

In December 2005, theLos Angeles Timesannounced it would close its San Fernando Valley printing facility
in January 2006 and consolidate production at its remaining three facilities in Los Angeles, Costa Mesa, and Irwindale, California. The closing of the printing facility resulted in the
elimination of approximately 120 positions from across theLos Angeles Times'production facilities.

77

---



As
a result of the facility closing, the Company reclassified the San Fernando Valley printing facility land and building as held for sale at Dec 25, 2005. The Company recorded a
$2 million pretax charge in the fourth quarter of 2005 to reduce the carrying value of the San Fernando Valley printing facility's land and building to $24 million, the estimated fair
value of the assets less costs to sell the assets. The Company evaluated the machinery and equipment at the San Fernando Valley printing facility and determined that press and other related equipment
with a net book value of $16 million will be abandoned. Therefore, the Company reduced its estimate of the useful life of the press and other related equipment and recorded accelerated
depreciation of $16 million in the fourth quarter of 2005. The Company has idled the remaining San Fernando Valley machinery and equipment, which had a net
book value of $34 million at Dec. 25, 2005. The Company is currently evaluating alternative uses of this equipment. This evaluation is expected to be completed in 2006.

The
Company recorded a pretax charge in the fourth quarter of 2005 of $22 million, excluding severance related costs, as a result of its decision to close the San Fernando Valley
printing facility. A summary of the significant components of the $22 million pretax charge is as follows (in thousands):

|Accelerated depreciation on machinery and equipment |  | $ | 16,109
|--------------------------------------------------- |  | - | ------
|Impairment of assets held for sale                  |  |   | 2,127 
|Other                                               |  |   | 3,992 
|                                                    |  |  
|Total                                               |  | $ | 22,228
|                                                    |  |  

Employee Reductions

The Company reduced its staff by approximately 900 positions in 2005 and recorded a pretax charge of $45 million ($43 million at publishing,
$1 million at broadcasting & entertainment and $1 million at corporate). The eliminations included 120 positions as a result of closing theLos Angeles
Times'San Fernando Valley printing facility, as discussed above. As of Dec. 25, 2005, $7 million had been paid and an accrual of $38 million remained. The
Company recorded a pretax charge of $41 million in 2004 related to the elimination of approximately 600 positions in its publishing segment.

Non-Operating ItemsFiscal years 2005, 2004 and 2003 included several non-operating items.

Non-operating
items for 2005 are summarized as follows (in thousands):

|                                                                     |  | Proceeds |        | Pretax
Gain |   | After-tax
Gain (Loss) | 
|-------------------------------------------------------------------- |  | -------- | ------ | ----------- | - | --------------------- | 
|Gain on change in fair values of derivatives and related investments |  | $        |       |             | $ | 62,184                | 
|Gain on sales of subsidiaries and investments, net                   |  |          | 17,368 |             |   | 6,780                 | 
|Other, net                                                           |  |          | 5,166  |             |   | 897                   | 
|Income tax adjustments                                               |  |          |       |             |   |                      | 
|                                                                     |  |          |        |             |   |                       | 
|Total non-operating items                                            |  | $        | 22,534 |             | $ | 69,861                | 
|                                                                     |  |          |        |             |   |                       | 

In 2005, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $62 million non-cash pretax gain resulted from an $85 million decrease in the fair value of the derivative component of the Company's PHONES, which was
partially offset by a $23 million decrease in the fair value of 16 million shares of Time Warner common stock.

78

---



As
a result of the United States Tax Court opinion issued on Sept. 27, 2005 related to the Matthew Bender tax dispute, the Company recorded additional income tax expense of
$150 million in the third quarter of 2005 (see Note 12). In the first quarter of 2005, the Company reduced its income tax expense and liabilities by a total of $12 million as a
result of favorably resolving certain other federal income tax issues.

Non-operating
items for 2004 are summarized as follows (in thousands):

|                                                                     |  | Proceeds |        | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |  
|-------------------------------------------------------------------- |  | -------- | ------ | ------------------ | - | --------------------- | -
|Loss on change in fair values of derivatives and related investments |  | $        |       |                    | $ | (18,497               | )
|Loss on early debt retirement                                        |  |          |       |                    |   | (140,506              | )
|Gain on sales of subsidiaries and investments, net                   |  |          | 23,973 |                    |   | 20,347                |  
|Loss on investment write-downs and other, net                        |  |          | 16,259 |                    |   | (6,388                | )
|                                                                     |  |          |        |                    |   |                       |  
|Total non-operating items                                            |  | $        | 40,232 |                    | $ | (145,044              | )
|                                                                     |  |          |        |                    |   |                       |  

In 2004, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $18 million non-cash pretax loss resulted from a $39 million increase in the fair value of the derivative component of the Company's PHONES, which was
partially offset by a $21 million increase in the fair value of 16 million shares of Time Warner common stock.

In
2004, the Company redeemed all of its outstanding $400 million ($396 million net of unamortized discount) 7.45% debentures due 2009 and retired $66 million
($64 million net of unamortized discount) of its 7.25% debentures due 2013 and $165 million ($160 million net of unamortized discount) of its 6.61% debentures due 2027 through
cash tender offers. The Company paid approximately $760 million
to retire this debt and, as a result, recorded a one-time, pretax loss of $141 million in 2004. The Company funded these transactions with cash and the issuance of commercial paper.

In
2004, the gain on sales of subsidiaries and investments related primarily to the sale of the Company's 50% interest inLa
Opiniónfor $20 million, resulting in a pretax gain of $18 million.

Non-operating
items for 2003 are summarized as follows (in thousands):

|                                                                     |  | Proceeds |         | Pretax
Gain (Loss) |   | After-tax
Gain (Loss) |  
|-------------------------------------------------------------------- |  | -------- | ------- | ------------------ | - | --------------------- | -
|Gain on change in fair values of derivatives and related investments |  | $        |        |                    | $ | 84,066                |  
|Gain on sales of subsidiaries and investments, net                   |  |          | 174,836 |                    |   | 147,507               |  
|Loss on investment write-downs                                       |  |          |        |                    |   | (9,764                | )
|Gain on insurance recoveries                                         |  |          | 27,000  |                    |   | 22,291                |  
|Other non-operating loss, net                                        |  |          |        |                    |   | (2,853                | )
|Income tax adjustments                                               |  |          |        |                    |   |                      |  
|                                                                     |  |          |         |                    |   |                       |  
|Total non-operating items                                            |  | $        | 201,836 |                    | $ | 241,247               |  
|                                                                     |  |          |         |                    |   |                       |  

In 2003, the change in the fair values of derivatives and related investments related entirely to the Company's PHONES and related Time Warner
investment. The $84 million non-cash pretax gain resulted from an $86 million increase in the fair value of 16 million shares of Time Warner common stock, which was
partially offset by a $2 million increase in the fair value of the derivative component

79

---



of
the PHONES. Also in 2003, the Company determined that the decline in fair value of certain public and private investments was other than temporary and wrote down the investments to fair value. The
write-downs totaled $10 million in 2003.

In
2003, the gain on sales of subsidiaries and investments resulted primarily from the divestiture of the Company's remaining Denver radio station KKHK-FM and the sale of the
Company's investment in The Golf Channel. KKHK-FM, now known as KQMT-FM, plus $20 million in cash, was exchanged for the assets of KWBP-TV, Portland, Ore.,
and resulted in a pretax gain of $51 million. The sale of the investment in The Golf Channel resulted in a pretax gain of $48 million.

In
2003, the Company recorded a gain of $22 million as a result of settling the business interruption and property damage claims filed by WPIX-TV, New York, as a
result of the events of Sept. 11, 2001.

In
2003, the Company reduced its income tax expense and liabilities by a total of $25 million as a result of favorably resolving certain federal and state income tax issues.

NOTE 3:NEWSDAYANDHOY, NEW YORK CHARGE

In February 2004, a purported class action lawsuit was filed in New York Federal Court by certain advertisers of NewsdayandHoy, New York, alleging that they were overcharged for advertising as a result of
inflated circulation numbers at these two publications. The purported class action also alleges that entities that paid aNewsdaysubsidiary to deliver
advertising flyers were overcharged. In July 2004, another lawsuit was filed in New York Federal Court by certain advertisers ofNewsdayalleging
damages resulting from inflatedNewsdaycirculation numbers as well as federal and state antitrust violations. The Company intends to vigorously defend
these suits.

On
June 17, 2004, the Company publicly disclosed that it would reduce its reported circulation for bothNewsdayand Hoy, New York for the 12-month period
ending Sept. 30, 2003 and the six-month period ending March 31, 2004. The
circulation adjustments were the result of a review of reported circulation atNewsdayandHoy, New
York, conducted by the Company's internal audit staff and the Audit Bureau of Circulations ("ABC"). Subsequent to the June 17th disclosure, the Company continued its internal
review and found additional misstatements for these time periods, as well as misstatements that impacted the 12-month period ending Sept. 30, 2002. On Sept. 10, 2004, the
Company announced additional revisions to the circulation figures forNewsdayandHoy, New York, for the
12-month period ending Sept. 30, 2003 and the six-month period ending March 31, 2004. In November 2004, ABC released its audit reports for NewsdayandHoy, New York, for the 12-month period ending Sept. 30, 2003. In
March 2005, ABC released its audit reports forNewsdayfor the six-month periods ending March 31, 2004 and Sept. 30,
2004. In May 2005, ABC released its audit reports forHoy, New York, for the six-month periods ending March 31, 2004 and
Sept. 30, 2004. Audited circulation figures for bothNewsdayandHoy, New York, for these periods
were within the ranges previously disclosed. After releasing these reports, ABC recalledNewsday'saudit report and Publisher's Statements covering the
12-month period ending Sept. 30, 2002 and all ofHoy, New York's audit reports and Publisher's Statements covering the periods ending
March 31, 2000 through Sept. 30, 2002, stating that, due to insufficient information, they could not verify circulation for those periods. ABC also withdrew its unqualified opinion as to
the material fairness of the circulation reported forNewsdayfor the 12-month periods ending Sept. 30, 2000 and Sept. 30,
2001, again citing insufficient information necessary to confirm the unqualified opinions. ABC's circulation audit atNewsdayfor the
six-month period ending March 31, 2005 was issued in October 2005 with no significant adjustments. ABC's circulation audit at Hoy, New York, for the six-month period ending March 31, 2005
was issued in January 2006 with no

80

---



significant
adjustments. Circulation audits atNewsdayandHoy, New York, for the period ending
September 2005 are ongoing.Hoy, New York, converted to free distribution in January 2006. Due to this change, Hoy, New York's circulation for
the period ending September 2005 and going forward will be audited by the Certified Audit of Circulations.

As
a result of the misstatements of reported circulation atNewsdayandHoy, New York, the
Company recorded a pretax charge of $35 million in the second quarter of 2004 as its estimate of the probable cost to settle with advertisers based upon facts available at July 30, 2004,
the date of the Company's second quarter 2004 Form 10-Q filing. Subsequent to that date, the Company found additional circulation misstatements, which increased the cost to settle
with advertisers. As a result, the Company recorded an additional pretax charge of $55 million in the third quarter of 2004 to increase the estimate of the probable cost to settle with NewsdayandHoy, New York, advertisers to a total of $90 million. The Company will continue to
evaluate the adequacy of this charge on an ongoing basis.

A
summary of the activity with respect to theNewsdayandHoy, New York, advertiser
settlement accrual is as follows (in millions):

|Advertiser settlement accrual balance at Dec. 28, 2003 |                | $ |   |    
|------------------------------------------------------ | -------------- | - | -- | ---
|                                                       | 2004 provision |   |    | 90 
|                                                       | 2004 payments  |   |    | (41
|                                                       |                |   |   
|Advertiser settlement accrual balance at Dec. 26, 2004 |                |   | 49 |    
|                                                       | 2005 payments  |   |    | (34
|                                                       |                |   |   
|Advertiser settlement accrual balance at Dec. 25, 2005 |                | $ | 15 |    
|                                                       |                |   |   

In addition to the advertiser lawsuits, several class action and shareholder derivative suits have been filed against the Company and certain of
its current and former directors and officers as a result of the circulation misstatements atNewsdayand Hoy, New York. The suits, which are currently
pending in Illinois Federal and State Courts, allege breaches of fiduciary duties and other managerial and
director failings under Delaware law, the federal securities laws and ERISA. The Company believes the complaints are without merit and intends to vigorously defend the suits.

The
Securities and Exchange Commission, the United States Attorney for the Eastern District of New York and the Nassau County District Attorney are conducting inquiries into the
circulation practices atNewsdayandHoy, New York. The Company is cooperating fully with these
inquiries. The Company cannot predict with certainty the outcome of these inquiries.

NOTE 4: INVENTORIES

Inventories consisted of the following (in thousands):

|                   |  | Dec. 25, 2005 |        | Dec. 26, 2004
|------------------ |  | ------------- | ------ | -------------
|Newsprint          |  | $             | 32,672 |              
|Supplies and other |  |               | 11,431 |              
|                   |  |               |        |              
|Total inventories  |  | $             | 44,103 |              
|                   |  |               |        |              

Newsprint inventories valued under the LIFO method were less than current cost by approximately $14 million at Dec. 25, 2005 and
$6 million at Dec. 26, 2004.

81

---



NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets at Dec. 25, 2005 and Dec. 26, 2004 consisted of the following (in thousands):

|                                                                 |                                | Dec. 25, 2005 |         | Dec. 26, 2004
|---------------------------------------------------------------- | ------------------------------ | ------------- | ------- | -------------
|
|Intangible assets subject to amortization                        |                                |               |         |              
|Subscribers (useful life of 15 to 20 years)                      |                                | $             | 190,657 |              
|Network affiliation agreements (useful life of 40 years)(1)      |                                |               | 290,320 |              
|Other (useful life of 3 to 40 years)                             |                                |               | 23,482  |              
|                                                                 |                                |               |         |              
|Total                                                            |                                | $             | 504,459 |              
|                                                                 |                                |               |         |              
|Goodwill and other intangible assets not subject to amortization |                                |               |         |              
|Goodwill                                                         |                                |               |         |              
|                                                                 | Publishing                     |               |         |              
|                                                                 | Broadcasting and entertainment |               |         |              
|                                                                 |                                |               |         |              
|Total goodwill                                                   |                                |               |         |              
|Newspaper mastheads                                              |                                |               |         |              
|FCC licenses                                                     |                                |               |         |              
|Tradename                                                        |                                |               |         |              
|                                                                 |                                |               |         |              
|Total                                                            |                                |               |         |              
|                                                                 |                                |               |         |              
|Total goodwill and other intangible assets                       |                                |               |         |              
|                                                                 |                                |               |         |              

---

82

---



The changes in the carrying amount of intangibles and goodwill during the years ended Dec. 25, 2005 and Dec. 26, 2004 were as
follows (in thousands):

|                                                                           |  | Publishing |           | Broadcasting and
Entertainment |   | Total     |  
|-------------------------------------------------------------------------- |  | ---------- | --------- | ------------------------------ | - | --------- | -
|Intangible assets subject to amortization                                  |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                                |  | $          | 99,504    |                                | $ | 364,700   |  
|Amortization expense                                                       |  |            | (7,427    | )                              |   | (11,436   | )
|Amortizable intangibles acquired during year                               |  |            | 138       |                                |   |          |  
|Adjustments related to finalization of purchase accounting                 |  |            |          |                                |   | (7,200    | )
|                                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 26, 2004                                                |  | $          | 92,215    |                                | $ | 364,064   |  
|Amortization expense                                                       |  |            | (7,231    | )                              |   | (11,964   | )
|Amortizable intangibles acquired during year                               |  |            | 239       |                                |   |          |  
|                                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 25, 2005                                                |  | $          | 85,223    |                                | $ | 334,100   |  
|                                                                           |  |            |           |                                |   |           |  
|Goodwill                                                                   |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                                |  | $          | 3,920,158 |                                | $ | 1,579,694 |  
|Goodwill acquired during year                                              |  |            | 562       |                                |   |          |  
|Adjustments related to finalization of purchase accounting                 |  |            |          |                                |   | (13,035   | )
|                                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 26, 2004                                                |  | $          | 3,920,720 |                                | $ | 1,566,659 |  
|Goodwill acquired during year                                              |  |            | 4,147     |                                |   |          |  
|Adjustment for tax resolutions(1)                                          |  |            | (3,500    | )                              |   |          |  
|Adjustment related to Matthew Bender and Mosby Tax Liability (see Note 12) |  |            | 459,116   |                                |   |          |  
|                                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 25, 2005                                                |  | $          | 4,380,483 |                                | $ | 1,566,659 |  
|                                                                           |  |            |           |                                |   |           |  
|Other intangible assets not subject to amortization                        |  |            |           |                                |   |           |  
|Balance as of Dec. 28, 2003                                                |  | $          | 1,583,746 |                                | $ | 1,084,814 |  
|Adjustments related to finalization of purchase accounting                 |  |            |          |                                |   | 29,000    |  
|Cumulative effect of change in accounting principle(2)                     |  |            |          |                                |   | (29,160   | )
|                                                                           |  |            |           |                                |   |           |  
|Balance as of Dec. 25, 2005 and Dec. 26, 2004                              |  | $          | 1,583,746 |                                | $ | 1,084,654 |  
|                                                                           |  |            |           |                                |   |           |  
|Total goodwill and other intangibles as of Dec. 25, 2005                   |  | $          | 6,049,452 |                                | $ | 2,985,413 |  
|                                                                           |  |            |           |                                |   |           |  

---

Estimated annual amortization expense will be approximately $20 million for each of the next five years, excluding the effects of any
acquisitions or dispositions subsequent to Dec. 25, 2005.

83

---





NOTE 6: TMCT I AND TMCT II

In connection with the Company's acquisition of Times Mirror in 2000, the Company acquired investments in TMCT I and TMCT II.

TMCT IIn 1997, Times Mirror completed a transaction involving agreements with its largest shareholders, Chandler Trust
No. 1 and Chandler Trust No. 2 (collectively, the "Chandler Trusts") which resulted in the formation of a new limited liability company, TMCT, LLC ("TMCT I"). As a result of the
Company's acquisition of Times Mirror, the Chandler Trusts became significant shareholders of the Company.

At
Dec. 25, 2005, the assets of TMCT I included 13 million shares of the Company's common stock and 442,596 shares of the Company's Series C preferred stock
(collectively, "TMCT I Shares"); eight real properties ("Real Properties") and a portfolio of fixed income and equity investments ("TMCT I Portfolio"). TMCT I has no outstanding
debt. The estimated fair market value of the TMCT I assets at Dec. 25, 2005 and Dec. 26, 2004 is shown in the table below (in thousands):

|                 |  | TMCT I Asset Information (unaudited)
|---------------- |  | ------------------------------------
|
|TMCT I Shares    |  | $                                   
|                 |  |                                     
|Real Properties  |  | $                                   
|                 |  |                                     
|TMCT I Portfolio |  | $                                   
|                 |  |                                     

Summarized income and expense information for TMCT I is shown in the following table for the years ended Dec. 25, 2005, Dec. 26, 2004 and
Dec. 28, 2003 (in thousands):

|                                              |  | TMCT I Income and Expense Information (unaudited) |       
|--------------------------------------------- |  | ------------------------------------------------- | ------
|
|TMCT I Shares dividend income                 |  | $                                                 | 26,706
|Real Properties lease income                  |  |                                                   | 24,166
|TMCT I Portfolio interest and dividend income |  |                                                   | 10,767
|TMCT I Portfolio net realized gains           |  |                                                   | 392   
|                                              |  |                                                   |       
|                                              |  | $                                                 | 62,031
|                                              |  |                                                   |       
|TMCT I operating expenses                     |  | $                                                 | (9,317
|                                              |  |                                                   |       

The Company leases the Real Properties from TMCT I and accounts for the lease as a property financing obligation in its consolidated balance sheet. On
Aug. 8, 2009, the end of the lease term, the Company has the option to purchase all of the Real Properties for their fair market value. If the Real Properties are not purchased by the Company,
they will remain the assets of TMCT I and may, as provided for under the terms of the lease agreement, be leased by the Company at fair market value
rent. The agreement provides for two additional 12-year lease terms with fair market value purchase options at the end of each term.

The
Company and the Chandler Trusts share in the cash flows of the various assets held by TMCT I. The cash flows from the Real Properties and the TMCT I Portfolio are
largely allocated to the Chandler Trusts, while the cash flows from the TMCT I Shares are largely allocated to the

84

---



Company.
Due to the allocations of the economic benefits in TMCT I, for financial reporting purposes 80% of the TMCT I Shares are included in treasury stock, 80% of the preferred stock
dividends on the Series C preferred stock are excluded from preferred stock dividends and 80% of the dividends on the common stock are effectively eliminated. The Company accounts for its 20%
investment in the TMCT I Portfolio under the equity method.

The
Company's investment in TMCT I totaled $83 million, $82 million and $99 million at Dec. 25, 2005, Dec. 26, 2004 and Dec. 28, 2003,
respectively. In 2005, 2004 and 2003, the Company recognized equity income of $2 million in each year related to the TMCT I Portfolio. During 2005, 2004 and 2003, the Company recorded
net realized gains on the TMCT I Portfolio of $1 million, $4 million and $2 million, respectively. The net realized gains were recorded as non-operating items
in each year.

TMCT IIIn 1999, Times Mirror completed a second transaction involving agreements with the Chandler Trusts, resulting
in the formation of another new limited liability company, TMCT II, LLC ("TMCT II").

At
Dec. 25, 2005, the assets of TMCT II included 39 million shares of the Company's common stock, 380,972 shares of the Company's Series D-1
preferred stock and 245,100 shares of the Company's Series D-2 preferred stock (collectively, "TMCT II Shares"); a portfolio of fixed income investments that were funded with
the proceeds from the redemption of six unrelated real estate investment trust interests in 2004 and two in 2005 ("REIT Portfolio"); a portfolio of fixed income and equity investments ("TMCT II
Portfolio"); and a portfolio of venture capital and private equity investments ("Venture Capital Portfolio"). TMCT II has no outstanding debt. The estimated fair market value of the
TMCT II assets at Dec. 25, 2005 and Dec. 26, 2004 is shown in the table below (in thousands):

|                          |  | TMCT II Asset Information (unaudited)
|------------------------- |  | -------------------------------------
|
|TMCT II Shares            |  | $                                    
|                          |  |                                      
|REIT Portfolio            |  | $                                    
|                          |  |                                      
|TMCT II Portfolio         |  | $                                    
|                          |  |                                      
|Venture Capital Portfolio |  | $                                    
|                          |  |                                      

85

---



Summarized income and expense information for TMCT II is shown in the following table for the years ended Dec. 25, 2005, Dec. 26, 2004 and
Dec. 28, 2003 (in thousands):

|                                                                             |  | TMCT II Income and Expense Information (unaudited) |       
|---------------------------------------------------------------------------- |  | -------------------------------------------------- | ------
|
|TMCT II Shares dividend income                                               |  | $                                                  | 48,853
|REIT Portfolio income                                                        |  |                                                    | 38,434
|TMCT II Portfolio and Venture Capital Portfolio interest and dividend income |  |                                                    | 6,474 
|TMCT II Portfolio, Venture Capital Portfolio and REIT Portfolio net losses   |  |                                                    | (984  
|                                                                             |  |                                                    |       
|Total                                                                        |  | $                                                  | 92,777
|                                                                             |  |                                                    |       
|TMCT II operating expenses                                                   |  | $                                                  | (8,270
|                                                                             |  |                                                    |       

The Company and the Chandler Trusts share in the cash flows of the various assets held by TMCT II. The cash flows from the REIT Portfolio, the
TMCT II Portfolio and the Venture Capital Portfolio are largely allocated to the Chandler Trusts. The cash flows from the TMCT II Shares are largely allocated to the Company. Due to the
allocations of the economic benefits in TMCT II, for financial reporting purposes 80% of the TMCT II Shares are included in treasury stock, 80% of the preferred stock dividends on the
Series D-1 and D-2 preferred stock are excluded from preferred stock dividends and 80% of the dividends on the common stock are effectively eliminated. The Company
accounts for its 20% investments in the REIT Portfolio, the TMCT II Portfolio and the Venture Capital Portfolio under the equity method.

The
Company's investment in TMCT II totaled $196 million at Dec. 25, 2005 and $198 million at Dec. 26, 2004 and Dec. 28, 2003. The Company
recognized equity income related to the REIT Portfolio, TMCT II Portfolio and Venture Capital Portfolio investments of $8 million in 2005, $9 million in 2004 and
$10 million in 2003. During 2005, 2004 and 2003, the Company recorded net losses of $3 million, $4 million and $8 million, respectively, related to net realized losses and
the write-downs of certain investments in the Venture Capital Portfolio. The net losses were recorded as non-operating items in each year.

The
TMCT I and TMCT II LLC agreements have no specific term, and the dissolution, determination of liquidation values and distribution of assets require the mutual consent
of the Company and the Chandler Trusts.

86

---



NOTE 7: INVESTMENTS

Investments consisted of the following (in thousands):

|                                            |  | Dec. 25, 2005 |         | Dec. 26, 2004
|------------------------------------------- |  | ------------- | ------- | -------------
|Time Warner stock related to PHONES debt    |  | $             | 282,880 |              
|Other cost method investments               |  |               | 59,355  |              
|Equity investments in TMCT I and TMCT II(1) |  |               | 279,766 |              
|Other equity method investments             |  |               | 293,542 |              
|                                            |  |               |         |              
|Total investments                           |  | $             | 915,543 |              
|                                            |  |               |         |              

---

Cost method investments in public companies and debt securities were recorded at fair value in the consolidated balance sheets. At Dec. 25,
2005, the Company's cost method investments included public companies, mainly Time Warner, and private companies. The investment in Time Warner at Dec. 25, 2005 consisted of 19 million
shares, which included 16 million shares related to the PHONES (see Notes 1 and 8). The Company's equity method investments at Dec. 25, 2005 included the following private
companies:

|Company                                       |  | % Owned |  
|--------------------------------------------- |  | ------- | -
|BrassRing                                     |  | 27      | %
|CareerBuilder                                 |  | 33      | %
|California Independent Postal Systems         |  | 50      | %
|Classified Ventures                           |  | 28      | %
|Comcast Sports Network                        |  | 25      | %
|Consumer Networks                             |  | 17      | %
|ShopLocal, LLC (formerly CrossMedia Services) |  | 33      | %
|Legacy.com                                    |  | 40      | %
|TMCT I Portfolio(1)                           |  | 20      | %
|TMCT II Portfolio(1)                          |  | 20      | %
|Topix                                         |  | 25      | %
|TV Food Network                               |  | 31      | %
|The WB Television Network(2)                  |  | 22      | %

---

The Company does not guarantee any indebtedness for any of its investees. During 2005, the Company sold certain investments resulting in a pretax
gain of $7 million. During 2004, the Company sold its 50% interest in La Opinion for $20 million and recorded a pretax gain of $18 million. During 2003, the Company sold its
equity interest in The Golf Channel, which resulted in a pretax gain of $48 million. Also in 2003, the Company sold several investments resulting in a pretax gain of $6 million.

In
2005, 2004 and 2003, the Company concluded that the decline in the value of certain public and private investments was other than temporary and wrote down the investments to fair
value. Non-cash,

87

---



pretax
losses totaled $3 million, $6 million and $10 million in 2005, 2004 and 2003, respectively. See Note 2 for further discussion.

For
investments classified as available-for-sale and recorded at fair value under FAS No. 115, the aggregate cost basis, unrealized gain and fair value
were as follows (in thousands):

|                             |  | Dec. 25, 2005 |        | Dec. 26, 2004
|---------------------------- |  | ------------- | ------ | -------------
|
|Marketable equity securities |  | $             | 27,521 |              

The difference between cost and fair value, net of related tax effects, is recorded in the accumulated other comprehensive income component of shareholders'
equity and amounted to a net gain of $16 million at Dec. 25, 2005 and $20 million at Dec. 26, 2004. The cost bases of the investments in the tables above are net of
write-downs recorded in the consolidated statements of income.

NOTE 8: LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

|                                                                                            |  | Dec. 25, 2005 |           | Dec. 26, 2004 |  
|------------------------------------------------------------------------------------------- |  | ------------- | --------- | ------------- | -
|Commercial paper, weighted average interest rate of 4.4% and 2.4%, respectively             |  | $             | 923,532   |               | $
|Medium-term notes, weighted average interest rate of 6.2% in 2005 and 2004, due 2005-2008   |  |               | 555,585   |               |  
|Property financing obligation, effective interest rate of 7.7%, expiring 2009 (see Note 6)  |  |               | 60,372    |               |  
|4.875% notes due 2010, net of unamortized discount of $718                                  |  |               | 449,282   |               |  
|7.25% debentures due 2013, net of unamortized discount of $2,478 and $2,818, respectively   |  |               | 79,605    |               |  
|5.25% notes due 2015, net of unamortized discount of $1,519                                 |  |               | 328,481   |               |  
|7.5% debentures due 2023, net of unamortized discount of $4,204 and $4,438, respectively    |  |               | 94,546    |               |  
|6.61% debentures due 2027, net of unamortized discount of $2,305 and $2,409, respectively   |  |               | 82,655    |               |  
|7.25% debentures due 2096, net of unamortized discount of $18,304 and $18,492, respectively |  |               | 129,696   |               |  
|Interest rate swap                                                                          |  |               | 29,714    |               |  
|Other notes and obligations                                                                 |  |               | 18,553    |               |  
|                                                                                            |  |               |           |               |  
|Total debt excluding PHONES                                                                 |  |               | 2,752,021 |               |  
|Less portions due within one year                                                           |  |               | (302,460  | )             |  
|                                                                                            |  |               |           |               |  
|Long-term debt excluding PHONES                                                             |  |               | 2,449,561 |               |  
|2% PHONES debt related to Time Warner stock, due 2029                                       |  |               | 509,701   |               |  
|                                                                                            |  |               |           |               |  
|Total long-term debt                                                                        |  | $             | 2,959,262 |               | $
|                                                                                            |  |               |           |               |  

88

---



Long-Term Debt IssuanceIn 2005, the Company issued $450 million
($449 million net of unamortized discount) 4.875% notes due 2010 and $330 million ($328 million net of unamortized discount) 5.25% notes due 2015. The proceeds from the issuance
were used to repay commercial paper.

Medium-Term NotesNotes issued under these programs generally have maturities from one to six years and may not be
redeemed by the Company prior to maturity.

Interest Rate SwapThe Company is currently a party to one interest rate swap agreement. This swap agreement relates to the
$100 million 7.5% debentures due in 2023 and effectively converts the fixed 7.5% rate to a variable rate based on LIBOR.

Current Portion of Long-Term DebtThe current portion of long-term debt at Dec. 25, 2005
includes $286 million of commercial paper, $15 million of property financing obligation and $2 million of other obligations due within one year.

Exchangeable Subordinated Debentures due 2029 ("PHONES")In 1999, the Company issued 8 million PHONES for an aggregate
principal amount of approximately $1.3 billion. The principal amount was equal to the value of 16 million shares of Time Warner common stock at the closing price of $78.50 per share on
April 7, 1999. Quarterly interest payments are made to the PHONES holders at an annual rate of 2% of the initial principal. The Company records both cash and non-cash interest
expense on the discounted debt component of the PHONES. The PHONES debenture agreement requires principal payments equal to any dividends declared on the 16 million shares of Time Warner common
stock. In 2005, Time Warner declared quarterly dividends of $.05 per share. A payment of $.10 per PHONES was made in the fourth quarter of 2005, and a payment of $.10 per PHONES will be due in the
first quarter of 2006. The company records the dividends it receives on its Time Warner common stock as dividend income and accounts for the related payment to the PHONES holders as principal
reduction.

The
Company may redeem the PHONES at any time for the higher of the principal value of the PHONES ($156.84 per PHONES at Dec. 25, 2005) or the then market value of two shares of
Time Warner common stock, subject to certain adjustments. At any time, holders of the PHONES may exchange a PHONES for an amount of cash equal to 95% (or 100% under certain circumstances) of the
market value of two shares of Time Warner common stock. At Dec. 25, 2005, the market value per PHONES was $74.00, and the market value of two shares of Time Warner common stock was $35.36.

Under
the provisions of FAS No. 133, the PHONES consist of a discounted debt component, which is presented at book value, and a derivative component, which is presented at fair
value. Changes in the fair value of the derivative component of the PHONES are recorded in the statement of income. The fair value of the derivative component of the PHONES debt is calculated as the
difference between the quoted market value of the PHONES and the estimated fair value of the discounted debt component of the PHONES. The fair value of the discounted debt component of the PHONES is
calculated based on an estimate of the current interest rate available to the Company for debt of the same remaining maturity and similar terms to the PHONES. The book value of the discounted debt
component is based on the prevailing interest rate (8.125%) at issuance of the PHONES. The market value of the PHONES, which are traded on the New York Stock Exchange, was $592 million and
$728 million at Dec. 25, 2005 and Dec. 26, 2004, respectively.

89

---



The
discounted debt component and derivative component of the PHONES were as follows (in thousands):

|                                                    |                                                | Dec. 25, 2005 |         | Dec. 26, 2004
|--------------------------------------------------- | ---------------------------------------------- | ------------- | ------- | -------------
|PHONES Debt:                                        |                                                |               |         |              
|                                                    | Discounted debt component (at book value)      |               | $       | 454,038      
|                                                    | Derivative component (at estimated fair value) |               |         | 55,663       
|                                                    |                                                |               |         |              
|                                                    | Total                                          |               | $       | 509,701      
|                                                    |                                                |               |         |              
|Time Warner stock related to PHONES (at fair value) |                                                | $             | 282,880 |              
|                                                    |                                                |               |         |              

If the PHONES are exchanged in the next year, the Company intends to refinance the PHONES, and has the ability to do so on a long-term basis through
its existing revolving credit agreements. Accordingly, the PHONES have been classified as long-term.

Revolving Credit AgreementsAt Dec. 25, 2005, the Company had revolving credit agreements with a number of financial
institutions providing for borrowings in an aggregate amount of up to $1.2 billion. Borrowings under these agreements, which expire in December 2008, would be at a rate equal to LIBOR
plus 0.35%. The revolving credit agreements allow the Company to elect one-month to twelve-month LIBOR rates, based on the term of the borrowing. At Dec. 25, 2005, the
one-month LIBOR rate was 4.38% and the twelve-month LIBOR rate was 4.85%. The agreements contain various interest rate options and provide for annual fees based on a percentage of the
commitment. The agreements contain covenants that require the Company to maintain a minimum interest coverage ratio. No amounts were borrowed under the agreements at Dec. 25, 2005, and the
Company was in compliance with the covenants. Annual fees totaled approximately $1.1 million in 2005, $0.9 million in 2004 and $1.1 million in 2003. In addition to the exchange
value of the PHONES, the Company intends to refinance $638 million of commercial paper and $293 million of medium-term notes scheduled to mature by Dec. 25, 2006, and
has the ability to do so on a long-term basis through its existing revolving credit agreements. Accordingly, these notes and commercial paper have been classified as long-term.

MaturitiesDebt at Dec. 25, 2005 matures as shown below (in thousands):

|2006       |  | $ | 302,460  
|---------- |  | - | ---------
|2007       |  |   | 18,550   
|2008       |  |   | 1,482,247
|2009       |  |   | 13,224   
|2010       |  |   | 451,056  
|Thereafter |  |   | 994,185  
|           |  |  
|Total      |  | $ | 3,261,722
|           |  |  

90

---



NOTE 9: CONTRACTS PAYABLE FOR BROADCAST RIGHTS

Contracts payable for broadcast rights are classified as current or long-term liabilities in accordance with the payment terms of the contracts.
Required payments under contractual agreements for broadcast rights recorded at Dec. 25, 2005 are shown in the table below (in thousands):

|2006       |  | $ | 329,930
|---------- |  | - | -------
|2007       |  |   | 195,935
|2008       |  |   | 138,731
|2009       |  |   | 91,485 
|2010       |  |   | 45,500 
|Thereafter |  |   | 57,227 
|           |  |  
|Total      |  | $ | 858,808
|           |  |  

NOTE 10: FAIR VALUE OF FINANCIAL INSTRUMENTS

Estimated fair values and carrying amounts of the Company's financial instruments are as follows (in thousands):

|                                       |  | Dec. 25, 2005 |           | Dec. 26, 2004
|-------------------------------------- |  | ------------- | --------- | -------------
|
|Cost method investments                |  | $             | 348,791   |              
|Debt                                   |  | $             | 3,286,708 |              
|Contracts payable for broadcast rights |  | $             | 796,278   |              

The following methods and assumptions were used to estimate the fair value of each category of financial instruments.

Cost Method InvestmentsCost method investments in public companies were recorded at fair value in the consolidated balance
sheets (see Notes 1 and 7). Cost method investments in private companies were recorded at cost, net of write-downs, and fair value was generally estimated based on prices recently paid for
shares in those companies.

DebtFair value was estimated based on quoted market prices for similar issues or on current rates available to the Company
for debt of the same remaining maturities and similar terms. The carrying value of the Company's derivative instruments approximates fair value. The fair value of the PHONES was determined by
reference to the market value resulting from trading on a national securities exchange.

Contracts Payable for Broadcast RightsFair value was estimated using the discounted cash flow method.

NOTE 11: COMMITMENTS AND CONTINGENCIES

The Company has entered into commitments for broadcast rights that are not currently available for broadcast and are therefore not included in the financial
statements. These commitments totaled $252 million at Dec. 25, 2005. Payments for broadcast rights generally commence when the programs become available for broadcast.

91

---





The Company had commitments totaling $252 million at Dec. 25, 2005 related to the purchase of property, plant and equipment and talent contracts. In
addition, under its current agreement with Abitibi Consolidated Inc., the Company has a commitment to purchase 450,000 metric tons of newsprint each year over the next two years at prevailing
market prices at the time of purchase. The Company is in the process of negotiating an amendment to this agreement, which among other things, would extend the current agreement to 2009. The Company
leases certain equipment and office and production space under various operating leases. Lease expense was $58 million in 2005, $56 million in 2004 and $58 million in 2003. The
table below presents the future minimum lease payments to be made under non-cancelable operating leases at Dec. 25, 2005 (in thousands):

|2006       |  | $ | 62,320 
|---------- |  | - | -------
|2007       |  |   | 55,810 
|2008       |  |   | 50,000 
|2009       |  |   | 42,723 
|2010       |  |   | 29,034 
|Thereafter |  |   | 50,150 
|           |  |  
|Total      |  | $ | 290,037
|           |  |  

The Company and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. In addition, the Company and
its subsidiaries are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies. See Note 3 for a
discussion of potential liability related toNewsdayandHoy, New York, and see Note 12 for a
discussion of potential income tax liabilities. The Company does not
believe that any other matters or proceedings presently pending will have a material adverse effect on its consolidated financial position, results of operations or liquidity.

NOTE 12: INCOME TAXES

The following is a reconciliation of income taxes computed at the U.S. federal statutory rate to income taxes reported in the consolidated statements of income
(in thousands):

|                                                                                   |  | 2005 |           | 2004 |   | 2003    |  
|---------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | ------- | -
|Income before income taxes and cumulative effect of change in accounting principle |  | $    | 1,110,241 |      | $ | 941,111 |  
|                                                                                   |  |      |           |      |   |         |  
|Federal income taxes at 35%                                                        |  | $    | 388,584   |      | $ | 329,389 |  
|State and local income taxes, net of federal tax benefit                           |  |      | 38,742    |      |   | 32,758  |  
|Matthew Bender/Mosby adjustment                                                    |  |      | 150,493   |      |   |        |  
|Income tax settlement adjustments                                                  |  |      | (11,829   | )    |   |        |  
|Other                                                                              |  |      | 9,562     |      |   | 5,640   |  
|                                                                                   |  |      |           |      |   |         |  
|Income taxes reported                                                              |  | $    | 575,552   |      | $ | 367,787 |  
|                                                                                   |  |      |           |      |   |         |  
|Effective tax rate                                                                 |  |      | 51.8      | %    |   | 39.1    | %

In 2005, the Company increased its income tax expense by $150 million as a result of the Matthew Bender Tax Court decision (see "Matthew Bender and Mosby
Tax Liability" discussion below) and reduced income tax expense by $12 million as a result of resolving certain federal income tax issues. In 2003, the Company reduced its income tax expense by
$25 million as a result of resolving certain federal and state income tax issues.

92

---



Components
of income tax expense charged to income were as follows (in thousands):

|                   |                 | 2005 |         | 2004    |   | 2003   
|------------------ | --------------- | ---- | ------- | ------- | - | -------
|Currently payable: |                 |      |         |         |   |        
|                   | U.S. federal    |      | $       | 443,233 |   | $      
|                   | State and local |      |         | 45,571  |   |        
|                   |                 |      |         |         |   |        
|                   | Sub-total       |      |         | 488,804 |   |        
|Deferred:          |                 |      |         |         |   |        
|                   | U.S. federal    |      |         | 72,716  |   |        
|                   | State and local |      |         | 14,032  |   |        
|                   |                 |      |         |         |   |        
|                   | Sub-total       |      |         | 86,748  |   |        
|                   |                 |      |         |         |   |        
|Total              |                 | $    | 575,552 |         | $ | 367,787
|                   |                 |      |         |         |   |        

Significant components of the Company's net deferred tax liabilities were as follows (in thousands):

|                                                               |  | Dec. 25, 2005 |           | Dec. 26, 2004 |  
|-------------------------------------------------------------- |  | ------------- | --------- | ------------- | -
|Net properties                                                 |  | $             | 239,821   |               | $
|Net intangible assets                                          |  |               | 1,252,851 |               |  
|Pensions                                                       |  |               | 316,467   |               |  
|Investments                                                    |  |               | 417,214   |               |  
|PHONES interest                                                |  |               | 267,885   |               |  
|Other future taxable items                                     |  |               | 25,880    |               |  
|                                                               |  |               |           |               |  
|Total deferred tax liabilities                                 |  |               | 2,520,118 |               |  
|                                                               |  |               |           |               |  
|Broadcast rights                                               |  |               | (4,968    | )             |  
|Postretirement and postemployment benefits other than pensions |  |               | (64,579   | )             |  
|Deferred compensation                                          |  |               | (76,901   | )             |  
|Other accrued liabilities                                      |  |               | (89,642   | )             |  
|Accrued employee compensation and benefits                     |  |               | (9,731    | )             |  
|Accounts receivable                                            |  |               | (15,834   | )             |  
|Other future deductible items                                  |  |               | (15,639   | )             |  
|State operating loss carryforwards                             |  |               | (34,391   | )             |  
|Valuation allowances on state operating loss carryforwards     |  |               | 29,926    |               |  
|                                                               |  |               |           |               |  
|Total deferred tax assets                                      |  |               | (281,759  | )             |  
|                                                               |  |               |           |               |  
|Net deferred tax liability                                     |  | $             | 2,238,359 |               | $
|                                                               |  |               |           |               |  

Operating Loss CarryforwardsAt Dec. 25, 2005, the Company had approximately
$676 million of operating loss carryforwards for state income tax purposes. These carryforwards arose in certain states primarily as a result of intercompany interest expense, royalty expense
and management fees allocated to the Company's various subsidiaries, and expire between 2006 and 2025. The deferred tax assets related to these carryforwards totaled approximately $34 million,
net of federal taxes, at Dec. 25, 2005. However, the Company believes it is more likely than not that $30 million of the deferred tax assets will not be realized because the related
carryforwards will expire before being utilized. Therefore, in accordance with FAS No. 109, "Accounting for Income Taxes," the Company has established valuation allowances of $30 million
on the deferred tax assets related to the state carryforwards. The state operating loss carryforwards increased in 2005 because the Company generated additional tax losses in certain states.

93

---



Matthew Bender and Mosby Tax LiabilityDuring 1998, Times Mirror, which was acquired by the Company in 2000, disposed of its
Matthew Bender and Mosby subsidiaries in separate transactions, which were structured to qualify as tax-free reorganizations under the Internal Revenue Code. The Company believes these
transactions were completed on a tax-free basis. However, the Internal Revenue Service ("IRS") audited the transactions and disagreed with the position taken by Times Mirror. In the fourth
quarter of 2001, the Company
received an IRS adjustment to increase Times Mirror's 1998 taxable income by approximately $1.6 billion. The Company filed a petition in United States Tax Court in November 2002 to
contest the IRS position, and in December 2004, the Company presented its position in United States Tax Court.

On
Sept. 27, 2005, the United States Tax Court issued an opinion contrary to the Company's position and determined that the Matthew Bender transaction was a taxable sale. In
January 2006, the Tax Court extended its opinion in the Matthew Bender case to the Mosby transaction given the similarity of the two transactions. Taxes and related interest for both the
Matthew Bender and Mosby transactions total approximately $1 billion. Over time, deductions for state taxes and interest are expected to reduce the net cash outlay to approximately
$840 million.

The
Company will appeal the Tax Court ruling to the United States Court of Appeals for the Seventh Circuit. The Company does not expect a ruling before the first half of 2007. The
Company cannot predict with certainty the outcome of this appeal.

Times
Mirror established a tax reserve of $180 million in 1998 when it entered into the transactions. The reserve represented Times Mirror's best estimate of the amount the
expected IRS and state income tax claims could be settled for based upon an analysis of the facts and circumstances surrounding the issue. In accordance with Emerging Issues Task Force ("EITF") Issue
No. 93-7, "Uncertainties Related to Income Taxes in a Purchase Business Combination," the Company treated this item as an uncertain tax position at the time of the Times Mirror
acquisition in 2000 and concluded that the estimate determined by Times Mirror was the most appropriate estimate of the exposure. The Company has maintained this initial reserve, plus interest, and
has evaluated the adequacy of the reserve on a periodic basis. At Dec. 26, 2004, the reserve, including pretax interest of $66 million, totaled $246 million ($221 million
after including the tax benefit of the interest). In 2005, prior to the Tax Court ruling, the Company recorded additional after-tax interest of $7 million on the reserve.

As
a result of the Tax Court ruling, the Company increased its tax reserve by an additional $609 million in the third quarter of 2005 by recording additional income tax expense of
$150 million, representing additional after-tax interest applicable to the post-acquisition period, and goodwill of $459 million. In accordance with EITF
No. 93-7, the Company adjusted goodwill because the tax contingencies existed at the time of the Times Mirror acquisition. On Sept. 30, 2005, the Company paid
$880 million to the IRS, representing the federal tax and interest owed on the transactions, and financed the payment through the issuance of commercial paper. The Company expects to make
related state tax and interest payments of approximately $125 million during 2006 ($87 million after including the federal tax benefit of the state taxes and interest).

94

---



A
summary of the activity with respect to the Matthew Bender and Mosby tax liability is as follows (in millions):

|Liability at Dec. 26, 2004:                                          |                                                                                                            |                                          |     |    
|-------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ---------------------------------------- | --- | ---
|                                                                     | Tax                                                                                                        |                                          | $   | 180
|                                                                     | After-tax interest ($66 million pretax)                                                                    |                                          |     | 41 
|                                                                     |                                                                                                            |                                          |    
|Liability at Dec. 26, 2004 (included in "other obligations")         |                                                                                                            |                                          | 221 |    
|                                                                     | After-tax interest recorded in income tax expense in the first three quarters of 2005 ($11 million pretax) |                                          |     | 7  
|                                                                     | Additional reserve recorded as a result of the Tax Court ruling:                                           |                                          |     |    
|                                                                     |                                                                                                            | Charged to income tax expense            |     |    
|                                                                     |                                                                                                            | Additional goodwill                      |     |    
|                                                                     |                                                                                                            |                                          |    
|Liability at Sept. 25, 2005                                          |                                                                                                            |                                          | 837 |    
|                                                                     | Federal tax and interest paid on Sept. 30, 2005:                                                           |                                          |     |    
|                                                                     |                                                                                                            | Federal tax                              |     |    
|                                                                     |                                                                                                            | After-tax interest ($338 million pretax) |     |    
|                                                                     | After-tax interest recorded in income tax expense in the fourth quarter of 2005 ($3 million pretax)        |                                          |     | 2  
|                                                                     |                                                                                                            |                                          |    
|Liability at Dec. 25, 2005 (included in "other current liabilities") |                                                                                                            | $                                        | 87  |    
|                                                                     |                                                                                                            |                                          |    

PHONESIn connection with the routine examination of the Company's federal income tax
returns for 2000 and 2001, the IRS has proposed that the Company capitalize the interest on the PHONES as additional tax basis in the Company's 16 million shares of Time Warner common stock,
rather than currently deducting such interest. The National Office of the IRS has issued a Technical Advice Memorandum that supports the proposed treatment. The Company disagrees with the IRS's
position and requested that the IRS administrative appeals office review the issue. An appeals officer was appointed in August 2005, and the Company had an initial meeting with the appeals
office in December 2005. Discussions with the appeals office regarding this issue are on-going. The effect of the treatment proposed by the IRS would be to increase the Company's
tax liability by approximately $88 million for the period 2000-2001 and by approximately $214 million for the period 2002 through 2005. If the IRS were to prevail in its
proposed treatment, there would be no effect on the Company's reported income for any of these periods. The potential tax payments would be recorded as a reduction in the Company's deferred tax
liability, and the Company has accrued the interest that would be assessed on these potential payments.

Income Tax ReservesThe Company's liability for estimated federal and state audit adjustments, including after-tax
interest, was approximately $96 million and $326 million at Dec. 25, 2005 and Dec. 26, 2004, respectively. These amounts are included in "other obligations" in the
Company's consolidated balance sheet. The liability declined in 2005 primarily because of the United States Tax Court decision regarding the Matthew Bender transaction. As discussed in the "Matthew
Bender and Mosby Tax Liability" section above, the Company had an income tax reserve of $221 million at Dec. 26, 2004 for this issue. During the third quarter of 2005, the tax reserve
was reclassified to "other current liabilities" in the Company's consolidated balance sheet.

Although
management believes its estimates and judgments are reasonable, the resolutions of the Company's tax issues are unpredictable and could result in tax liabilities that are
significantly higher or lower than that which has been provided by the Company.

95

---



NOTE 13: PENSION AND POSTRETIREMENT BENEFITS

Employee Pension PlansIn connection with the establishment of the Tribune Company ESOP in 1988,
Tribune amended its company-sponsored pension plan for employees not covered by a collective bargaining agreement. The Tribune Company pension plan continued to provide substantially the same pension
benefits as under the pre-amended plan until December 1998. After that date, Tribune pension benefit credits were frozen in terms of pay and service.

In
connection with the Times Mirror acquisition, the Company assumed defined benefit pension plans and various other contributory and non-contributory retirement plans
covering substantially all of Times Mirror's former employees. In general, benefits under the Times Mirror defined benefit plans were based on years of service and the employee's compensation during
the last five years of employment. In December 2005, the pension plan benefits for former Times Mirror non-union and non-Newsday employees were frozen. As a result of
the plan freeze, a pretax curtailment gain of $18 million was recorded. On March 31, 2006, the pension plan benefits for Newsday union and non-union employees will be frozen.
Benefits provided by Times Mirror's Employee Stock Ownership Plan ("Times Mirror ESOP") are coordinated with certain pension benefits and, as a result, the defined benefit plan obligations are net of
the actuarially equivalent value of the benefits earned under the Times Mirror ESOP. The maximum offset is equal to the value of the benefits earned under the defined benefit plan.

The
Company also maintains several small plans for other employees. The Company's portion of assets and liabilities for multi-employer union pension plans is not determinable.

Postretirement Benefits Other Than PensionsThe Company provides postretirement health care and life insurance benefits to
eligible employees under a variety of plans. The various plans have significantly different provisions for lifetime maximums, retiree cost-sharing, health care providers, prescription drug
coverage and other benefits.

96

---



Obligations and Funded StatusSummarized information for the Company's defined benefit pension and postretirement plans is
provided below (in thousands):

|                                                 |  | Pension Benefits |           | Other Postretirement Benefits |  
|------------------------------------------------ |  | ---------------- | --------- | ----------------------------- | -
|
|Change in benefit obligations:                   |  |                  |           |                               |  
|Projected benefit obligations, beginning of year |  | $                | 1,461,180 |                               | $
|Service cost                                     |  |                  | 25,160    |                               |  
|Interest cost                                    |  |                  | 81,436    |                               |  
|Plan amendments                                  |  |                  |          |                               |  
|Curtailment gain                                 |  |                  | (44,566   | )                             |  
|Special termination benefits                     |  |                  | 1,434     |                               |  
|Impact of Medicare Reform Act                    |  |                  |          |                               |  
|Actuarial (gain) loss                            |  |                  | 156,385   |                               |  
|Benefits paid                                    |  |                  | (81,900   | )                             |  
|                                                 |  |                  |           |                               |  
|Projected benefit obligations, end of year       |  |                  | 1,599,129 |                               |  
|                                                 |  |                  |           |                               |  
|Change in plans' assets:                         |  |                  |           |                               |  
|Fair value of plans' assets, beginning of year   |  |                  | 1,559,351 |                               |  
|Actual return on plans' assets                   |  |                  | 113,769   |                               |  
|Employer contributions                           |  |                  | 7,178     |                               |  
|Benefits paid                                    |  |                  | (81,900   | )                             |  
|                                                 |  |                  |           |                               |  
|Fair value of plans' assets, end of year         |  |                  | 1,598,398 |                               |  
|                                                 |  |                  |           |                               |  
|Funded (under funded) status of the plans        |  |                  | (731      | )                             |  
|Unrecognized net actuarial loss (gain)           |  |                  | 869,596   |                               |  
|Unrecognized prior service cost                  |  |                  | 2,518     |                               |  
|Unrecognized transition asset                    |  |                  | (1        | )                             |  
|                                                 |  |                  |           |                               |  
|Prepaid (accrued) benefit cost                   |  | $                | 871,382   |                               | $
|                                                 |  |                  |           |                               |  

Amounts recognized in the statement of financial position consist of (in thousands):

|                                       |  | Pension Benefits |         |   |   |         |  
|-------------------------------------- |  | ---------------- | ------- | - | - | ------- | -
|
|
|
|Prepaid benefit costs                  |  | $                | 908,895 |   | $ | 950,766 |  
|Accrued benefit costs                  |  |                  | (83,759 | ) |   | (78,002 | )
|Intangible asset                       |  |                  | 507     |   |   |        |  
|Accumulated other comprehensive income |  |                  | 45,739  |   |   | 11,973  |  
|                                       |  |                  |         |   |   |         |  
|Net amount recognized                  |  | $                | 871,382 |   | $ | 884,737 |  
|                                       |  |                  |         |   |   |         |  

The accumulated benefit obligation, which excludes the impact of future compensation increases, for all defined benefit pension plans was $1,566 million
and $1,405 million at Dec. 25, 2005 and Dec. 26, 2004, respectively. The projected benefit obligation at Dec. 25, 2005 includes $1.5 billion related to the Company's
qualified pension plans and $77 million related to its non-qualified plans. The Company's non-qualified plans are not funded. The funded status of the Company's
qualified plans was $76 million at Dec. 25, 2005. The Newsday employee pension benefit plan will be frozen on March 31,

97

---



2006.
The Newsday employee plan freeze is currently expected to reduce the projected benefit obligation by $21 million.

The
components of net periodic benefit cost (credit) for Company-sponsored plans were as follows (in thousands):

|                                    |  | Pension Benefits |          | Other Postretirement Benefits
|----------------------------------- |  | ---------------- | -------- | -----------------------------
|
|Service cost                        |  | $                | 25,160   |                              
|Interest cost                       |  |                  | 81,436   |                              
|Expected return on plans' assets    |  |                  | (127,346 | )                            
|Recognized actuarial loss           |  |                  | 59,095   |                              
|Amortization of prior service costs |  |                  | (1,415   | )                            
|Amortization of transition asset    |  |                  | (5       | )                            
|Special termination benefits(1)     |  |                  | 1,434    |                              
|Curtailment gain                    |  |                  | (17,825  | )                            
|                                    |  |                  |          |                              
|Net periodic benefit cost (credit)  |  | $                | 20,534   |                              
|                                    |  |                  |          |                              

---

|                                                                                           |  | Pension Benefits |         | Other Postretirement Benefits
|------------------------------------------------------------------------------------------ |  | ---------------- | ------- | -----------------------------
|
|Increase in minimum pension liabilities included in other comprehensive income, net of tax |  | $                | (20,597 | )                            

AssumptionsWeighted average assumptions used each year in accounting for pension benefits and other
postretirement benefits were:

|                                                 |  | Pension Benefits |   | Other
Postretirement
Benefits |  
|------------------------------------------------ |  | ---------------- | - | ----------------------------- | -
|
|Discount rate for expense                        |  | 5.75             | % | 6.25                          | %
|Discount rate for obligations                    |  | 5.50             | % | 5.75                          | %
|Increase in future salary levels for expense     |  | 3.50             | % | 3.75                          | %
|Increase in future salary levels for obligations |  | 3.50             | % | 3.50                          | %
|Long-term rate of return on plans' assets        |  | 8.50             | % | 8.50                          | %

98

---





The Company used a building block approach to determine its current 8.5% assumption of the long-term expected rate of return on pension plan assets.
Based on historical market studies, the Company's long-term expected returns for equity and fixed income securities approximate 10% and 6%, respectively. The Company's current 2006 target
asset allocation for pension plan assets is 75% in equity securities and 25% in fixed income securities and other. The Company bases the rate used for discounting future benefit obligations and
calculating interest cost on an index of Aa-rated corporate bonds.

At
Dec. 25, 2005 and Dec. 26, 2004, the Company's prepaid pension asset included an unrecognized net actuarial loss of $870 million and $803 million,
respectively. A significant portion of this net actuarial loss resulted from the difference between the Company's expected returns on plan assets and the actual losses on plan assets in 2002 and 2001.
Expected returns on plan assets were $158 million and $176 million in 2002 and 2001, respectively; actual losses were $161 million and $113 million, respectively. In
accordance with FAS No. 87, "Employers' Accounting for Pensions," the actuarial loss will be recognized in net periodic pension expense over the estimated average remaining service period of
active employees expected to receive benefits. The Company's policy is to incorporate asset-related gains and losses into the asset value used to calculate the expected return on plan assets and into
the calculation of amortization of unrecognized net actuarial loss over a four-year period.

Plan AssetsThe Company's pension plans' asset allocations at Dec. 25, 2005 and Dec. 26, 2004 were as follows (in millions):

|                        |  | Plan Assets |      
|----------------------- |  | ----------- | -----
|
|
|Equity securities       |  | $           | 1,186
|Fixed income securities |  |             | 329  
|Other                   |  |             | 83   
|                        |  |             |      
|Total                   |  | $           | 1,598
|                        |  |             |      

Health Care Cost Trend RatesFor purposes of measuring 2005 postretirement health care costs, a 9.0% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5.0% for 2009 and remain at that level thereafter. For purposes of measuring health care
obligations at Dec. 25, 2005, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually to 5.0% for
2010 and remain at that level thereafter. On Dec. 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("Act") was signed into law. The Act resulted in a
$15 million reduction in the accumulated other postretirement obligations for prior service costs and a $1 million reduction in net periodic postretirement benefit costs.

Assumed
health care cost trend rates have a significant effect on the amounts reported for health care plans. As of the date of this report, a 1% change in assumed health care cost trend
rates would have the following effects (in thousands):

|                               |  | 1% Increase |       | 1% Decrease |  
|------------------------------ |  | ----------- | ----- | ----------- | -
|Service cost and interest cost |  | $           | 372   |             | $
|Projected benefit obligation   |  | $           | 6,218 |             | $

99

---



Cash FlowsThe Company contributed $7 million to certain of its union and non-qualified pension plans and
$15 million to its other postretirement plans in 2005. The Company plans to contribute $7 million to certain of its union and non-qualified pension plans and
$13 million to its other postretirement plans in 2006.

Expected Future Benefit PaymentsThe following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid (in thousands):

|          |  | Pension Benefits |         | Other
Postretirement
Benefits
|--------- |  | ---------------- | ------- | -----------------------------
|2006      |  | $                | 77,930  |                              
|2007      |  |                  | 75,222  |                              
|2008      |  |                  | 75,439  |                              
|2009      |  |                  | 76,342  |                              
|2010      |  |                  | 77,548  |                              
|2011-2015 |  |                  | 408,164 |                              

NOTE 14: CAPITAL STOCK AND SHARE PURCHASE PLAN

Under the Company's Restated Certificate of Incorporation, 12 million shares of preferred stock are authorized. Preferred stock is issuable in series under
terms and conditions determined by the Company's Board of Directors.

Series B Preferred StockIn 1989, the Company established a series of 1.6 million shares of Series B Convertible
Preferred Stock and issued 1.59 million shares to the Company's ESOP. In December 2003, the Series B convertible preferred stock was converted into 15.4 million shares of
common stock. Each share of the Series B preferred stock paid a cumulative dividend of 7.75% annually, had a liquidation value of $220 per share, was convertible into 16 shares of the Company's
common stock and was voted with the common stock with an entitlement to 18.32 votes per preferred share.

Series C, D-1 and D-2 Convertible Preferred StockIn connection with the June 12, 2000 merger with
Times Mirror, outstanding shares of Times Mirror cumulative, non-voting preferred stock were converted into shares of Tribune preferred stock with similar terms. An additional
0.2 million shares of preferred stock, net of treasury stock, were issued due to the conversion. Series C convertible preferred stock is cumulative, non-voting preferred
stock, which is entitled to annual dividends of 8%, based on liquidation value. Annual dividends for Series D-1 and D-2 were paid at the rate of 6.67%, 6.44% and 6.22%
in 2005, 2004, and 2003, respectively, and will be paid at the rate of 6.91% in 2006 based on liquidation value. Dividends on Series D-1 and D-2 preferred stocks will
increase ratably from 2006 until 2012 pursuant to a predetermined schedule. Series C, D-1 and D-2 convertible preferred stocks relate to Times Mirror recapitalization
transactions whereby TMCT I and TMCT II (see Note 6) were formed. Series C, D-1 and D-2 preferred stocks are convertible into the Company's common
stock in 2025 and thereafter. The conversion factor is calculated by dividing $500 plus accrued and unpaid dividends by the average closing prices of the Company's common stock for the 20 trading days
immediately preceding the conversion date.

Common and Treasury StockAt Feb. 17, 2006, there were 6,461 holders of record. During 2005, the Company repurchased and retired
12.2 million shares of its common stock in the open market for $440 million. During 2004, the Company repurchased and retired 15.5 million shares of its common stock in the open
market for $732 million. During 2003, the Company repurchased 7.5 million shares of

100

---



its
common stock in the open market for $356 million. At Dec. 25, 2005, the Company had authorization to repurchase an additional $1 billion of its common stock. At
Dec. 25, 2005, 83.4 million treasury shares were held by TMCT I, TMCT II and other affiliates of the Company. During 2003, the Company retired 124.0 million treasury
shares.

Treasury Common Stock Held by Tribune Stock Compensation Fund ("TSCF")The TSCF purchased shares of the Company's common stock for the
purpose of funding certain existing stock-based compensation plans. In 2003, as a part of the treasury stock repurchase authorization, the TSCF purchased approximately 0.5 million shares of the
Company's common stock for $20 million. All shares acquired in 2003 by TSCF were utilized by December 2003. The TSCF was dissolved in the first quarter of 2005.

Share Purchase Rights PlanIn December 1997, the Company adopted a Share Purchase Rights Plan that replaced a similar agreement. The
plan provides for a dividend of one right on each outstanding share of the Company's common stock. Each right will entitle stockholders to buy one two-hundredth of a share of
Series A Junior Participating preferred stock at an exercise price of $125. These rights expire Jan. 5, 2008. The rights have no voting rights and are not exercisable until
10 days after the occurrence of certain triggering events, upon which the holders of the rights are entitled to purchase either the common stock of an acquirer or additional common stock of the
Company at a discounted price. The rights are redeemable at the option of the Company for $.005 per right. The Company has established a series of two million shares of Series A Junior
Participating Preferred Stock in connection with the plan, none of which have been issued.

NOTE 15: INCENTIVE COMPENSATION AND STOCK PLANS

Defined Contribution PlansThe Company maintains various qualified 401(k) savings plans, which permit eligible employees to make voluntary
contributions on a pretax basis. The plans allow participants to invest their savings in various investments including the Company's common stock. The Company enhanced its primary 401(k) plan to
include a larger Company contribution in 2004. This new plan was designed to replace the Company's ESOP that was fully allocated at the end of 2003. Company contributions to all of its defined
contribution plans were $33 million in 2005, $32 million in 2004 and $17 million in 2003. In 2005, the Company contributed an additional $26 million to these plans,
which related to and was charged to expense in 2004. In 2006, the Company will contribute to these plans an additional $26 million, which relates to and was charged to expense in 2005. In 2006,
the Company amended its primary 401(k) plan to make a portion of the Company's contributions discretionary.

Employee Stock Purchase PlanThis plan permits eligible employees to purchase the Company's common stock at 85% of market price. The Company
incurred charges of $0.2 million in 2005, 2004 and 2003 related to the administration of this plan. During 2005, 2004 and 2003, 682,624, 617,651, and 568,718 shares, respectively, were sold to
employees under this plan. A total of 16 million shares can be purchased under this plan. As of Dec. 25, 2005, a total of 3.1 million shares remained available for sale. The
weighted average fair value of shares sold in 2005 was $36.37. The Company plans to adopt FAS No. 123R in the first quarter of 2006 (see Note 1). FAS 123R requires that the
discount on purchases of the Company's common stock provided to eligible employees under the plan be expensed. The Company expects to record approximately $3.7 million of expense in 2006
related to the plan.

Employee Stock Ownership Plan ("ESOP")In 1988, the Company established an ESOP as a long-term employee benefit plan. In
connection therewith, the ESOP purchased, in 1988 and 1989,

101

---



approximately
3.2 million common shares and 1.59 million Series B convertible preferred shares of the Company at an aggregate cost of $375 million. The ESOP provided for
the awarding of shares of the Company's preferred and common stock on a noncontributory basis to eligible employees of the Company not covered by a collective bargaining agreement. At Dec. 28,
2003, all of the preferred and common stock had been allocated to employees, and the preferred stock had been converted into common shares.

Shares
of stock held by the ESOP were placed with the ESOP Trustee and were allocated to eligible employees annually. These common and preferred shares were allocated in the same
proportion that the current year's principal and interest payments bore to the total principal and interest to be paid over the lives of the related borrowings. Each preferred share was convertible
into 16 shares of the Company's common stock. The ESOP Trustee was required to convert the preferred shares when making distributions to participants upon their withdrawal from the ESOP. If at the
time of such conversion the price of the Company's common stock was below $13.75 per share, the Company was required, at its option, to either pay the difference in cash or issue additional common
stock.

The
Company recognized expense for this plan based upon cash contributions it made to the ESOP. The ESOP serviced its debt requirements with amounts received from preferred dividends and
Company contributions. ESOP debt service activity is summarized as follows (in thousands):

|                   |                            | 2003
|------------------ | -------------------------- | ----
|Debt Requirements: |                            |     
|                   | Principal                  |     
|                   | Interest                   |     
|                   |                            |     
|Total              |                            | $   
|                   |                            |     
|Debt Service:      |                            |     
|                   | Dividends                  |     
|                   | Company cash contributions |     
|                   |                            |     
|Total              |                            | $   
|                   |                            |     

1997 Incentive Compensation PlanIn 1997, the 1992 Long-Term Incentive Plan was replaced with the 1997 Incentive Compensation
Plan. At Dec. 25, 2005, remaining options outstanding under the 1992 plan totaled 60,000 shares, all of which were exercisable. The 1997 plan provides for the granting of awards to eligible
employees in any one or combination of stock options, performance equity program awards and annual management incentive program bonuses. At Dec. 25, 2005, options outstanding under the 1997
plan totaled 36.7 million shares, of which 35.2 million shares were exercisable. At Dec. 25, 2005, a total of 32.2 million shares were available for award under the 1997
plan. The stock options assumed in the Times Mirror acquisition are fully vested and exercisable. At Dec. 25, 2005, the converted Times Mirror stock options outstanding and exercisable totaled
7.2 million shares.

Under
the stock option portion of the 1997 plan, the option price may not be less than the market value of the Company's common stock at the time the option is granted. Options are
exercisable not less than six months or more than 10 years after the date the option is granted. General awards granted under the 1997 plan vest in annual 25% increments beginning one year from
the date of the grant. Under certain circumstances, replacement options are granted when a participant pays the exercise price of a stock option and related tax withholding obligations with previously
acquired shares of common stock. The number of replacement options granted is equal to the number of shares used to pay the exercise price and related tax withholding obligations. The exercise price
of a replacement

102

---



option
is equal to the market price of the underlying stock on the date of grant, and the term is equal to the remaining term of the original option. Replacement options vest one year from the date of
grant.

A
summary of stock option activity and weighted average prices related to general options follows (shares in thousands):

|                               |  | General Options(1)
|------------------------------ |  | ------------------
|
|
|Outstanding, beginning of year |  | 32,991            
|Granted                        |  | 3,780             
|Exercised                      |  | (993              
|Canceled/forfeited             |  | (1,289            
|                               |  |                   
|Outstanding, end of year       |  | 34,489            
|                               |  |                   
|Exercisable, end of year(2)    |  | 32,993            
|                               |  |                   

---

A summary of stock option activity and weighted average prices related to replacement options follows (shares in thousands):

|                               |  | Replacement Options
|------------------------------ |  | -------------------
|
|
|Outstanding, beginning of year |  | 10,845             
|Granted                        |  | 13                 
|Exercised                      |  | (20                
|Canceled/forfeited             |  | (1,318             
|                               |  |                    
|Outstanding, end of year       |  | 9,520              
|                               |  |                    
|Exercisable, end of year       |  | 9,507              
|                               |  |                    

103

---



The following table summarizes information about general options outstanding and general options exercisable at Dec. 25, 2005 (shares in thousands):

|              |  | General Options(1)
|------------- |  | ------------------
|
|
|$12.32-$24.35 |  | 7,089             
|$24.36-$39.93 |  | 4,494             
|$39.94-$40.50 |  | 9,153             
|$40.51-$52.50 |  | 13,753            

---

The following table summarizes information about replacement options outstanding and replacement options exercisable at Dec. 25, 2005
(shares in thousands):

|              |  | Replacement Options
|------------- |  | -------------------
|
|
|$33.13-$42.61 |  | 827                
|$42.62-$48.70 |  | 4,401              
|$48.71-$60.88 |  | 4,292              

104

---



NOTE 16: COMPREHENSIVE INCOME

Comprehensive income reflects all changes in the net assets of the Company during the period from transactions and other events and circumstances, except those
resulting from stock issuances, stock repurchases and dividends. The Company's comprehensive income includes net income, the change in the minimum pension liabilities, unrealized gains and losses on
marketable securities classified as available-for-sale, and foreign currency translation adjustments. The Company's comprehensive income was as follows (in thousands):

|                                                                                                                                 |  | 2005 |         | 2004 |   | 2003    |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Net income                                                                                                                       |  | $    | 534,689 |      | $ | 555,536 |  
|Change in minimum pension liabilities, net of taxes of $13,168, $1,116 and $1,111, respectively                                  |  |      | (20,597 | )    |   | (1,700  | )
|                                                                                                                                 |  |      |         |      |   |         |  
|Unrealized gain (loss) on marketable securities:                                                                                 |  |      |         |      |   |         |  
|Unrealized holding gain (loss) arising during the period, net of taxes of ($2,098), $612 and $6,791, respectively                |  |      | (3,282  | )    |   | 796     |  
|Add adjustment for loss on investment write-downs included in net income, net of taxes of ($114)                                 |  |      |        |      |   |        |  
|Less adjustment for (gain) loss on investment sales included in net income, net of taxes of $116, ($64) and $2,115, respectively |  |      | (181    | )    |   | 100     |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Change in net unrealized (gain) loss on securities, net of taxes                                                                 |  |      | (3,463  | )    |   | 896     |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Change in foreign currency translation adjustments, net of taxes of $45, $75 and $67, respectively                               |  |      | (70     | )    |   | 118     |  
|                                                                                                                                 |  |      |         |      |   |         |  
|Other comprehensive income (loss)                                                                                                |  |      | (24,130 | )    |   | (686    | )
|                                                                                                                                 |  |      |         |      |   |         |  
|Comprehensive income                                                                                                             |  | $    | 510,559 |      | $ | 554,850 |  
|                                                                                                                                 |  |      |         |      |   |         |  

Accumulated other comprehensive income (loss) is a separate component of shareholders' equity on the Company's balance sheet. A reconciliation of the components
of accumulated other comprehensive income (loss) is as follows (in thousands):

|                                                       |  | 2005 |         | 2004 |   | 2003   |  
|------------------------------------------------------ |  | ---- | ------- | ---- | - | ------ | -
|Minimum pension liabilities, net of tax:               |  |      |         |      |   |        |  
|Balance, beginning of year                             |  | $    | (7,304  | )    | $ | (5,604 | )
|Current year change                                    |  |      | (20,597 | )    |   | (1,700 | )
|                                                       |  |      |         |      |   |        |  
|Balance, end of year                                   |  |      | (27,901 | )    |   | (7,304 | )
|                                                       |  |      |         |      |   |        |  
|Unrealized gain, net of tax, on marketable securities: |  |      |         |      |   |        |  
|Balance, beginning of year                             |  |      | 19,910  |      |   | 19,014 |  
|Current year change                                    |  |      | (3,463  | )    |   | 896    |  
|                                                       |  |      |         |      |   |        |  
|Balance, end of year                                   |  |      | 16,447  |      |   | 19,910 |  
|                                                       |  |      |         |      |   |        |  
|Foreign currency translation adjustments, net of tax:  |  |      |         |      |   |        |  
|Balance, beginning of year                             |  |      | 224     |      |   | 106    |  
|Current year change                                    |  |      | (70     | )    |   | 118    |  
|                                                       |  |      |         |      |   |        |  
|Balance, end of year                                   |  |      | 154     |      |   | 224    |  
|                                                       |  |      |         |      |   |        |  
|Accumulated other comprehensive income (loss)          |  | $    | (11,300 | )    | $ | 12,830 |  
|                                                       |  |      |         |      |   |        |  

105

---



NOTE 17: BUSINESS SEGMENTS

Tribune Company is a media and entertainment company that conducts its operations through two business segments: publishing and broadcasting and entertainment. In
addition, certain administrative activities are reported and included under corporate. These segments reflect the manner in which the Company sells its products to the marketplace and the manner in
which it manages its operations and makes business decisions.

PublishingTribune Publishing operates 11 market-leading daily newspapers and related businesses, distributes entertainment listings and
syndicated content, operates a 24-hour cable news channel, and manages the websites of Tribune's daily newspapers and television stations, along with other branded sites targeting specific
communities of interest. The daily newspapers are theLos Angeles Times;Chicago Tribune; Newsday, serving
Nassau and Suffolk counties on Long Island, New York and the borough of Queens, New York;South Florida
Sun-Sentinel; Orlando Sentinel;The Baltimore Sun;The Hartford Courant; The Morning
Call, serving Pennsylvania's Lehigh Valley;Daily Press, serving the Virginia Peninsula; andThe
AdvocateandGreenwich Time, each serving Connecticut's Fairfield County.

Broadcasting and EntertainmentThe Company's broadcasting operations consist of The WB Television Network affiliates in New York, Los
Angeles, Chicago, Philadelphia, Boston, Dallas, Washington D.C., Atlanta, Houston, Seattle, Miami, Denver, St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans, and Albany; FOX
television affiliates in Seattle, Sacramento, Indianapolis, Hartford, Grand Rapids and Harrisburg; an ABC television affiliate in New Orleans; and
one radio station in Chicago. On Jan. 24, 2006, the Company announced that it had reached a 10-year agreement to affiliate 16 of its WB Network affiliates stations with a new
broadcast network, The CW Network, being launched in the fall of 2006. The WB Network will shut down at that time. Three of the Company's current WB Network affiliates (Philadelphia, Atlanta and
Seattle) will become independent stations at that time. Entertainment operations include Tribune Entertainment which distributes its own programming together with programming licensed from third
parties.

No
single customer provides more than 10% of the Company's revenue. In determining operating profit for each segment, none of the following items have been added or deducted: interest
and dividend income, interest expense, equity income and loss, non-operating items or income taxes. Assets represent those tangible and intangible assets used in the operations of each
segment. Corporate assets include cash and the Company's investment portfolio.

106

---



TRIBUNE COMPANY AND SUBSIDIARIES
BUSINESS SEGMENTS
(In thousands of dollars)

|                                  |                                         | 2005 |   | 2004       |   | 2003 |           
|--------------------------------- | --------------------------------------- | ---- | - | ---------- | - | ---- | ----------
|Operating Revenues                |                                         |      |   |            |   |      |           
|                                  | Publishing                              |      | $ | 4,096,850  |   | $    | 4,129,850 
|                                  | Broadcasting and entertainment          |      |   | 1,498,767  |   |      | 1,596,397 
|                                  |                                         |      |   |            |   |      |           
|                                  | Total operating revenues                |      | $ | 5,595,617  |   | $    | 5,726,247 
|                                  |                                         |      |   |            |   |      |           
|Operating Profit (Loss)(1)        |                                         |      |   |            |   |      |           
|                                  | Publishing                              |      | $ | 759,713    |   | $    | 726,207   
|                                  | Broadcasting and entertainment          |      |   | 436,523    |   |      | 544,300   
|                                  | Corporate expenses                      |      |   | (49,413    | ) |      | (52,218   
|                                  |                                         |      |   |            |   |      |           
|                                  | Total operating profit                  |      | $ | 1,146,823  |   | $    | 1,218,289 
|                                  |                                         |      |   |            |   |      |           
|Depreciation                      |                                         |      |   |            |   |      |           
|                                  | Publishing(2)                           |      | $ | 183,695    |   | $    | 171,599   
|                                  | Broadcasting and entertainment          |      |   | 39,300     |   |      | 40,992    
|                                  | Corporate                               |      |   | 1,630      |   |      | 1,635     
|                                  |                                         |      |   |            |   |      |           
|                                  | Total depreciation                      |      | $ | 224,625    |   | $    | 214,226   
|                                  |                                         |      |   |            |   |      |           
|Amortization of Intangible Assets |                                         |      |   |            |   |      |           
|                                  | Publishing                              |      | $ | 7,231      |   | $    | 7,430     
|                                  | Broadcasting and entertainment          |      |   | 11,964     |   |      | 11,433    
|                                  |                                         |      |   |            |   |      |           
|                                  | Total amortization of intangible assets |      | $ | 19,195     |   | $    | 18,863    
|                                  |                                         |      |   |            |   |      |           
|Capital Expenditures              |                                         |      |   |            |   |      |           
|                                  | Publishing                              |      | $ | 163,317    |   | $    | 171,435   
|                                  | Broadcasting and entertainment          |      |   | 36,851     |   |      | 35,266    
|                                  | Corporate                               |      |   | 5,777      |   |      | 10,647    
|                                  |                                         |      |   |            |   |      |           
|                                  | Total capital expenditures              |      | $ | 205,945    |   | $    | 217,348   
|                                  |                                         |      |   |            |   |      |           
|Assets                            |                                         |      |   |            |   |      |           
|                                  | Publishing                              |      | $ | 8,637,176  |   | $    | 8,218,516 
|                                  | Broadcasting and entertainment          |      |   | 4,425,135  |   |      | 4,444,988 
|                                  | Corporate                               |      |   | 1,483,931  |   |      | 1,491,928 
|                                  |                                         |      |   |            |   |      |           
|                                  | Total assets                            |      | $ | 14,546,242 |   | $    | 14,155,432
|                                  |                                         |      |   |            |   |      |           

---

107

---



TRIBUNE COMPANY AND SUBSIDIARIES
2005 QUARTERLY RESULTS (Unaudited)
(In thousands of dollars, except per share data)

|                                                                               |                                | Quarters |             |           |  
|------------------------------------------------------------------------------ | ------------------------------ | -------- | ----------- | --------- | -
|
|
|Operating Revenues                                                             |                                |          |             |           |  
|                                                                               | Publishing                     |          | $           | 1,005,512 |  
|                                                                               | Broadcasting and entertainment |          |             | 310,232   |  
|                                                                               |                                |          |             |           |  
|                                                                               | Total operating revenues       |          | $           | 1,315,744 |  
|                                                                               |                                |          |             |           |  
|Operating Profit                                                               |                                |          |             |           |  
|                                                                               | Publishing                     |          | $           | 198,539   |  
|                                                                               | Broadcasting and entertainment |          |             | 66,966    |  
|                                                                               | Corporate expenses             |          |             | (13,448   | )
|                                                                               |                                |          |             |           |  
|                                                                               | Total operating profit         |          |             | 252,057   |  
|Net income on equity investments                                               |                                |          | 471         |           |  
|Interest and dividend income                                                   |                                |          | 1,082       |           |  
|Interest expense                                                               |                                |          | (35,091     | )         |  
|Gain (loss) on change in fair values of derivatives and related investments(1) |                                |          | (2,253      | )         |  
|Gain on sales of subsidiaries and investments, net(2)                          |                                |          | 1,109       |           |  
|Other non-operating gain (loss), net                                           |                                |          | (2,700      | )         |  
|                                                                               |                                |          |             |           |  
|Income Before Income Taxes                                                     |                                |          | 214,675     |           |  
|Income taxes                                                                   |                                |          | (71,830     | )         |  
|                                                                               |                                |          |             |           |  
|Net Income                                                                     |                                |          | 142,845     |           |  
|Preferred dividends                                                            |                                |          | (2,090      | )         |  
|                                                                               |                                |          |             |           |  
|Net Income Attributable to Common Shares                                       |                                | $        | 140,755     |           | $
|                                                                               |                                |          |             |           |  
|Earnings Per Share(5)                                                          |                                |          |             |           |  
|                                                                               | Basic                          |          | $           | .44       |  
|                                                                               |                                |          |             |           |  
|                                                                               | Diluted                        |          | $           | .44       |  
|                                                                               |                                |          |             |           |  
|Common Dividends Per Share                                                     |                                | $        | .18         |           | $
|Common Stock Price (High-Low)                                                  |                                | $        | 42.37-38.59 |           | $

---

Notes to Quarterly Results:

108

---



TRIBUNE COMPANY AND SUBSIDIARIES
2004 QUARTERLY RESULTS (Unaudited)
(In thousands of dollars, except per share data)

|                                                                                   |                                | Quarters                                                        |             |           |    
|---------------------------------------------------------------------------------- | ------------------------------ | --------------------------------------------------------------- | ----------- | --------- | ---
|
|
|Operating Revenues                                                                 |                                |                                                                 |             |           |    
|                                                                                   | Publishing                     |                                                                 | $           | 1,003,583 |    
|                                                                                   | Broadcasting and entertainment |                                                                 |             | 328,734   |    
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Total operating revenues       |                                                                 | $           | 1,332,317 |    
|                                                                                   |                                |                                                                 |             |           |    
|Operating Profit                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Publishing                     |                                                                 | $           | 189,548   |    
|                                                                                   | Broadcasting and entertainment |                                                                 |             | 96,619    |    
|                                                                                   | Corporate expenses             |                                                                 |             | (12,892   | )  
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Total operating profit         |                                                                 |             | 273,275   |    
|Net income (loss) on equity investments                                            |                                |                                                                 | (4,373      | )         |    
|Interest and dividend income                                                       |                                |                                                                 | 1,276       |           |    
|Interest expense                                                                   |                                |                                                                 | (46,677     | )         |    
|Gain (loss) on change in fair value of derivatives and related investments(1)      |                                |                                                                 | (45,501     | )         |    
|Loss on early debt retirement(4)                                                   |                                |                                                                 |            |           |    
|Gain (loss) on sales of subsidiaries and investments, net(2)                       |                                |                                                                 | 21,518      |           |    
|Loss on investment write-downs(3)                                                  |                                |                                                                 | (2,981      | )         |    
|Other non-operating gain (loss), net                                               |                                |                                                                 | 385         |           |    
|                                                                                   |                                |                                                                 |             |           |    
|Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle |                                |                                                                 | 196,922     |           |    
|Income taxes                                                                       |                                |                                                                 | (76,241     | )         |    
|                                                                                   |                                |                                                                 |             |           |    
|Income Before Cumulative Effect of Change in Accounting Principle                  |                                |                                                                 | 120,681     |           |    
|Cumulative effect of change in accounting principle, net of tax                    |                                |                                                                 |            |           |    
|                                                                                   |                                |                                                                 |             |           |    
|Net Income                                                                         |                                |                                                                 | 120,681     |           |    
|Preferred dividends                                                                |                                |                                                                 | (2,077      | )         |    
|                                                                                   |                                |                                                                 |             |           |    
|Net Income Attributable to Common Shares                                           |                                | $                                                               | 118,604     |           | $  
|                                                                                   |                                |                                                                 |             |           |    
|Earnings (Loss) Per Share(5)                                                       |                                |                                                                 |             |           |    
|                                                                                   | Basic:                         |                                                                 |             |           |    
|                                                                                   |                                | Before cumulative effect of change in accounting principle, net |             | $         | .36
|                                                                                   |                                | Cumulative effect of change in accounting principle, net        |             |           |   
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   |                                | Total                                                           |             | $         | .36
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   | Diluted:                       |                                                                 |             |           |    
|                                                                                   |                                | Before cumulative effect of change in accounting principle, net |             | $         | .35
|                                                                                   |                                | Cumulative effect of change in accounting principle, net        |             |           |   
|                                                                                   |                                |                                                                 |             |           |    
|                                                                                   |                                | Total                                                           |             | $         | .35
|                                                                                   |                                |                                                                 |             |           |    
|Common Dividends Per Share                                                         |                                | $                                                               | .12         |           | $  
|Common Stock Price (High-Low)                                                      |                                | $                                                               | 53.00-48.89 |           | $  

---

Notes to Quarterly Results:

109

---



TRIBUNE COMPANY AND SUBSIDIARIES
ELEVEN YEAR FINANCIAL SUMMARY
(In thousands of dollars, except per share data)

|                                                                                                               |                                                                                   | 2005 |            | 2004      |  
|-------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---- | ---------- | --------- | -
|Operating Revenues                                                                                             |                                                                                   |      |            |           |  
|                                                                                                               | Publishing                                                                        |      | $          | 4,096,850 |  
|                                                                                                               | Broadcasting and entertainment                                                    |      |            | 1,498,767 |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Total operating revenues                                                          |      | $          | 5,595,617 |  
|                                                                                                               |                                                                                   |      |            |           |  
|Operating Profit                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Publishing                                                                        |      | $          | 759,713   |  
|                                                                                                               | Broadcasting and entertainment                                                    |      |            | 436,523   |  
|                                                                                                               | Corporate expenses                                                                |      |            | (49,413   | )
|                                                                                                               | Restructuring charges(2)                                                          |      |            |          |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Total operating profit                                                            |      |            | 1,146,823 |  
|                                                                                                               |                                                                                   |      |            |           |  
|Net income (loss) on equity investments                                                                        |                                                                                   |      | 41,209     |           |  
|Interest and dividend income                                                                                   |                                                                                   |      | 7,539      |           |  
|Interest expense                                                                                               |                                                                                   |      | (155,191   | )         |  
|Non-operating items and minority interest expense                                                              |                                                                                   |      | 69,861     |           |  
|                                                                                                               |                                                                                   |      |            |           |  
|Income from Continuing Operations Before Income Taxes and Cumulative Effect of Changes in Accounting Principle |                                                                                   |      | 1,110,241  |           |  
|Income taxes                                                                                                   |                                                                                   |      | (575,552   | )         |  
|                                                                                                               |                                                                                   |      |            |           |  
|Income from Continuing Operations Before Cumulative Effect of Changes in Accounting Principle                  |                                                                                   |      | 534,689    |           |  
|Discontinued Operations of Education Segment, net of tax                                                       |                                                                                   |      |           |           |  
|Discontinued Operations of QUNO, net of tax                                                                    |                                                                                   |      |           |           |  
|Cumulative effect of changes in accounting principles, net of tax(3)                                           |                                                                                   |      |           |           |  
|                                                                                                               |                                                                                   |      |            |           |  
|Net Income(4)                                                                                                  |                                                                                   | $    | 534,689    |           | $
|                                                                                                               |                                                                                   |      |            |           |  
|Share Information                                                                                              |                                                                                   |      |            |           |  
|Basic earnings per share                                                                                       |                                                                                   |      |            |           |  
|                                                                                                               | Continuing operations before cumulative effect of changes in accounting principle |      | $          | 1.68      |  
|                                                                                                               | Discontinued operations                                                           |      |            |          |  
|                                                                                                               | Cumulative effect of changes in accounting principle                              |      |            |          |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Net income                                                                        |      | $          | 1.68      |  
|                                                                                                               |                                                                                   |      |            |           |  
|Diluted earnings per share                                                                                     |                                                                                   |      |            |           |  
|                                                                                                               | Continuing operations before cumulative effect of changes in accounting principle |      | $          | 1.67      |  
|                                                                                                               | Discontinued operations                                                           |      |            |          |  
|                                                                                                               | Cumulative effect of changes in accounting principle                              |      |            |          |  
|                                                                                                               |                                                                                   |      |            |           |  
|                                                                                                               | Net income                                                                        |      | $          | 1.67      |  
|                                                                                                               |                                                                                   |      |            |           |  
|Common dividends per share                                                                                     |                                                                                   | $    | 0.72       |           | $
|Weighted average common shares outstanding (000's)                                                             |                                                                                   |      | 312,880    |           |  
|Financial Ratios                                                                                               |                                                                                   |      |            |           |  
|Operating profit margin                                                                                        |                                                                                   |      | 20.5       | %         |  
|Debt to capital including PHONES(5)                                                                            |                                                                                   |      | 26         | %         |  
|Debt to capital excluding PHONES(5)                                                                            |                                                                                   |      | 23         | %         |  
|Financial Position and Other Data                                                                              |                                                                                   |      |            |           |  
|Total assets                                                                                                   |                                                                                   | $    | 14,546,242 |           | $
|Long-term debt including PHONES                                                                                |                                                                                   |      | 2,959,262  |           |  
|Long-term debt excluding PHONES                                                                                |                                                                                   |      | 2,449,561  |           |  
|Shareholders' equity                                                                                           |                                                                                   |      | 6,725,551  |           |  
|Capital expenditures                                                                                           |                                                                                   |      | 205,945    |           |  

---

110

---





|2003 |            | 2002(1) |   | 2001       |   | 2000 |            | 1999 |   | 1998       |   | 1997 |           | 1996 |   | 1995      |  
|---- | ---------- | ------- | - | ---------- | - | ---- | ---------- | ---- | - | ---------- | - | ---- | --------- | ---- | - | --------- | -
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 4,036,920  |         | $ | 3,940,478  |   | $    | 3,903,431  |      | $ | 3,485,277  |   | $    | 1,621,347 |      | $ | 1,536,684 |  
|     | 1,557,909  |         |   | 1,443,950  |   |      | 1,349,935  |      |   | 1,465,553  |   |      | 1,302,058 |      |   | 1,153,006 |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 5,594,829  |         | $ | 5,384,428  |   | $    | 5,253,366  |      | $ | 4,950,830  |   | $    | 2,923,405 |      | $ | 2,689,690 |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 885,306    |         | $ | 851,417    |   | $    | 510,604    |      | $ | 648,326    |   | $    | 394,312   |      | $ | 377,137   |  
|     | 528,519    |         |   | 470,138    |   |      | 333,265    |      |   | 449,057    |   |      | 378,036   |      |   | 317,355   |  
|     | (53,351    | )       |   | (45,770    | ) |      | (41,640    | )    |   | (64,372    | ) |      | (39,506   | )    |   | (35,435   | )
|     |           |         |   | (27,253    | ) |      | (151,892   | )    |   |           |   |      |          |      |   |          |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     | 1,360,474  |         |   | 1,248,532  |   |      | 650,337    |      |   | 1,033,011  |   |      | 732,842   |      |   | 659,057   |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     | 5,590      |         |   | (40,875    | ) |      | (60,813    | )    |   | (79,374    | ) |      | (40,083   | )    |   | (33,980   | )
|     | 6,048      |         |   | 8,818      |   |      | 8,853      |      |   | 33,124     |   |      | 47,436    |      |   | 6,112     |  
|     | (198,123   | )       |   | (213,309   | ) |      | (254,521   | )    |   | (240,708   | ) |      | (113,031  | )    |   | (88,451   | )
|     | 241,247    |         |   | (63,211    | ) |      | (74,905    | )    |   | (165,301   | ) |      | 1,756,779 |      |   | 119,119   |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     | 1,415,236  |         |   | 939,955    |   |      | 268,951    |      |   | 580,752    |   |      | 2,383,943 |      |   | 661,857   |  
|     | (523,857   | )       |   | (331,376   | ) |      | (157,815   | )    |   | (270,351   | ) |      | (933,981  | )    |   | (272,660  | )
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     | 891,379    |         |   | 608,579    |   |      | 111,136    |      |   | 310,401    |   |      | 1,449,962 |      |   | 389,197   |  
|     |           |         |   |           |   |      |           |      |   | (86,015    | ) |      | 21,807    |      |   | 25,075    |  
|     |           |         |   |           |   |      |           |      |   |           |   |      |          |      |   |          |  
|     |           |         |   | (165,587   | ) |      |           |      |   |           |   |      | (3,060    | )    |   |          |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 891,379    |         | $ | 442,992    |   | $    | 111,136    |      | $ | 224,386    |   | $    | 1,468,709 |      | $ | 414,272   |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 2.78       |         | $ | 1.93       |   | $    | 0.28       |      | $ | 1.06       |   | $    | 6.03      |      | $ | 1.53      |  
|     |           |         |   |           |   |      |           |      |   | (.32       | ) |      | .09       |      |   | .10       |  
|     |           |         |   | (.55       | ) |      |           |      |   |           |   |      | (.01      | )    |   |          |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 2.78       |         | $ | 1.38       |   | $    | 0.28       |      | $ | 0.74       |   | $    | 6.11      |      | $ | 1.63      |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 2.61       |         | $ | 1.80       |   | $    | 0.28       |      | $ | 0.99       |   | $    | 5.49      |      | $ | 1.41      |  
|     |           |         |   |           |   |      |           |      |   | (.29       | ) |      | .08       |      |   | .09       |  
|     |           |         |   | (.50       | ) |      |           |      |   |           |   |      | (.01      | )    |   |          |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 2.61       |         | $ | 1.30       |   | $    | 0.28       |      | $ | 0.70       |   | $    | 5.56      |      | $ | 1.50      |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 0.44       |         | $ | 0.44       |   | $    | 0.44       |      | $ | 0.40       |   | $    | 0.36      |      | $ | 0.34      |  
|     | 311,295    |         |   | 301,932    |   |      | 298,295    |      |   | 271,951    |   |      | 237,367   |      |   | 242,428   |  
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|     | 24.3       | %       |   | 23.2       | % |      | 12.4       | %    |   | 20.9       | % |      | 25.1      | %    |   | 24.5      | %
|     | 22         | %       |   | 29         | % |      | 35         | %    |   | 34         | % |      | 37        | %    |   | 35        | %
|     | 18         | %       |   | 26         | % |      | 31         | %    |   | 30         | % |      | 23        | %    |   | 35        | %
|     |            |         |   |            |   |      |            |      |   |            |   |      |           |      |   |           |  
|$    | 14,280,152 |         | $ | 13,974,048 |   | $    | 14,380,587 |      | $ | 14,668,712 |   | $    | 8,740,047 |      | $ | 5,824,037 |  
|     | 2,381,617  |         |   | 3,260,795  |   |      | 3,699,165  |      |   | 4,020,936  |   |      | 2,694,073 |      |   | 1,615,955 |  
|     | 1,846,337  |         |   | 2,737,355  |   |      | 3,015,165  |      |   | 3,320,936  |   |      | 1,365,593 |      |   | 1,615,955 |  
|     | 7,028,124  |         |   | 6,119,235  |   |      | 5,642,341  |      |   | 5,877,347  |   |      | 3,458,617 |      |   | 2,356,617 |  
|     | 193,535    |         |   | 186,737    |   |      | 266,355    |      |   | 302,471    |   |      | 125,578   |      |   | 128,800   |  

---

111

---



TRIBUNE COMPANY AND SUBSIDIARIES

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In thousands of dollars)

|Description                                                  |                                 | Balance at
Beginning
of Period      |       | Additions
Charged to
Costs and
Expenses |        | Additions
Recorded
Upon
Acquisitions |   | Deductions |        | Balance
at End
of Period
|------------------------------------------------------------ | ------------------------------- | ----------------------------------- | ----- | --------------------------------------- | ------ | ------------------------------------ | - | ---------- | ------ | ------------------------
|Valuation accounts deducted from assets to which they apply: |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 25, 2005                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 35,837 |                                      | $ | 53,383     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 13,670 |                                      |   | 27,131     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 49,507                               |   | $          | 80,514 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 26, 2004                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 34,024 |                                      | $ | 60,072     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 15,444 |                                      |   | 33,338     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 49,468                               |   | $          | 93,410 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|Year ended Dec. 28, 2003                                     |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             | Accounts receivable allowances: |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 | Bad debts                           |       | $                                       | 51,173 |                                      | $ | 51,241     |        | $                       
|                                                             |                                 | Rebates, volume discounts and other |       |                                         | 16,195 |                                      |   | 37,646     |        |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         
|                                                             |                                 |                                     | Total |                                         | $      | 67,368                               |   | $          | 88,887 |                         
|                                                             |                                 |                                     |       |                                         |        |                                      |   |            |        |                         

112

---





ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, the
Company conducted an evaluation of its disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of Dec. 25,
2005. Based upon that evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective.

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, the
Company conducted an evaluation of the effectiveness of the design and operation of internal control over financial reporting based on criteria established inInternal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on that evaluation, the
Company's management concluded that internal control over financial reporting was effective as of Dec. 25, 2005. Management's assessment of the effectiveness of internal control over financial
reporting as of Dec. 25, 2005 has been audited by PricewaterhouseCoopers, LLP, an independent registered public accounting firm, as stated in their report included in Item 8.

The
Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of the inherent limitations of any internal control
system over financial reporting, there is only reasonable assurance that the Company's control over financial reporting will succeed in preventing or detecting misstatements under all potential future
conditions.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter ended Dec. 25, 2005
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information contained under the heading "Executive Officers of the Company" in Item 1 hereof, and the information contained under the headings "Stock
OwnershipSection 16(a) Beneficial Ownership Reporting Compliance," "Corporate GovernanceOverview," "Corporate GovernanceCommunicating with the Board of
Directors" and "Board of Directors" in the definitive Proxy Statement for the Company's May 2, 2006 Annual Meeting of Shareholders is incorporated herein by reference.

113

---



ITEM 11. EXECUTIVE COMPENSATION.

The information contained under the headings "Board of DirectorsDirector Compensation" and "Executive Compensation" in the definitive Proxy Statement
for the Company's May 2, 2006 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information contained under the headings "Stock OwnershipManagement Ownership" and "Stock OwnershipPrincipal Shareholders" in the
definitive Proxy Statement for the Company's May 2, 2006 Annual Meeting of Shareholders is incorporated herein by reference.

Equity Compensation Plan Information Table

The following table provides information as of Dec. 25, 2005 regarding the number of shares of Tribune common stock that may be issued under Tribune's
equity compensation plans.

|                                                           |  | (a)        |     | (b) |       | (c) |           
|---------------------------------------------------------- |  | ---------- | --- | --- | ----- | --- | ----------
|
|Equity compensation plans approved by security holders     |  | 37,294,743 | (2) | $   | 43.91 | (3) | 35,418,365
|Equity compensation plans not approved by security holders |  |           |     |     |      |     |          
|                                                           |  |            |     |     |       |     |           
|Total                                                      |  | 37,294,743 | (2) | $   | 43.91 | (3) | 35,418,365
|                                                           |  |            |     |     |       |     |           

---

114

---



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information contained under the headings "Board of DirectorsCertain Relationships and Related Transactions" and "Stock
OwnershipRelated Transactions" in the definitive Proxy Statement for the Company's May 2, 2006 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information contained under the headings "Board of DirectorsBoard, Board Committees and MeetingsAudit Committee," "Audit
CommitteePolicy on Audit Committee Pre-Approval of Audit, Audit-Related and Permissible Non-Audit Services of Independent Accountants" and "Audit
CommitteeFees Paid to Independent Accountants" in the definitive Proxy Statement for the Company's May 2, 2006 Annual Meeting of Shareholders is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

|(a)(1)&(2) |  | Financial Statements and Financial Statement Schedule filed as part of this report   
|---------- |  | -------------------------------------------------------------------------------------
|           |  | See Index to Financial Statements and Financial Statement Schedule on page 57 hereof.
|(a)(3)     |  | Index to Exhibits filed as part of this report                                       
|           |  | See Exhibit Index on pages 117 to 120 hereof.                                        
|(b)        |  | Exhibits                                                                             
|           |  | See Exhibit Index on pages 117 to 120 hereof.                                        
|(c)        |  | Financial Statement Schedule                                                         
|           |  | See Index to Financial Statements and Financial Statement Schedule on page 57 hereof.

115

---





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized, on Feb. 28, 2006.

| | TRIBUNE COMPANY
(Registrant)                                                               
| | -------------------------------------------------------------------------------------------
| | /s/DENNIS J. FITZSIMONSDennis J. FitzSimons
Chairman, President and Chief Executive Officer

Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the
capacities indicated on Feb. 28, 2006.

|Signature                                   |  | Title                                                                         
|------------------------------------------- |  | ------------------------------------------------------------------------------
|                                            |  |                                                                               
|/s/DENNIS J. FITZSIMONSDennis J. FitzSimons |  | Chairman, President, Chief Executive Officer and Director                     
|/s/DONALD C. GRENESKODonald C. Grenesko     |  | Senior Vice President/Finance and Administration (principal financial officer)
|/s/R. MARK MALLORYR. Mark Mallory           |  | Vice President and Controller (principal accounting officer)                  
|/s/JEFFREY CHANDLERJeffrey Chandler         |  | Director                                                                      
|/s/BETSY D. HOLDENBetsy D. Holden           |  | Director                                                                      
|/s/WILLIAM A. OSBORNWilliam A. Osborn       |  | Director                                                                      
|/s/ROGER GOODANRoger Goodan                 |  | Director                                                                      
|/s/DUDLEY S. TAFTDudley S. Taft             |  | Director                                                                      
|/s/KATHRYN C. TURNERKathryn C. Turner       |  | Director                                                                      

116

---





TRIBUNE COMPANY        EXHIBIT INDEX

Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by Tribune Company with the Securities and Exchange Commission,
as indicated. Exhibits marked with a circle (o) are management contracts or compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of
Regulation S-K. All other documents listed are filed with this Report.

|Number |  | Description                                                                                                                                                                                                                                                                                                                                                                          
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 *  |  | Amended and Restated Certificate of Incorporation of Tribune Company, dated June 12, 2000 (Exhibit 3.1 to Annual Report on Form 10-K for 2001)                                                                                                                                                                                                                                       
|3.1a * |  | Amended Certificate of Designation of Series A Junior Participating Preferred Stock, dated June 12, 2000 (Exhibit 3.1a to Current Report on Form 8-K dated June 12, 2000)                                                                                                                                                                                                            
|3.1b * |  | Amended Certificate of Designation of Series C Preferred Stock, dated February 13, 2001 (Exhibit 3.1c to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                        
|3.1c * |  | Amended Certificate of Designation of Series D-1 Preferred Stock, dated February 13, 2001 (Exhibit 3.1d to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                      
|3.1d * |  | Amended Certificate of Designation of Series D-2 Preferred Stock, dated February 13, 2001 (Exhibit 3.1e to Annual Report on Form 10-K for 2000)                                                                                                                                                                                                                                      
|3.2 *  |  | By-Laws of Tribune Company, as amended and in effect on October 19, 2005 (Exhibit 99 to Current Report on Form 8-K dated October 21, 2005)                                                                                                                                                                                                                                           
|4.1 *  |  | Rights Agreement between Tribune Company and First Chicago Trust Company of New York, as Rights Agent, dated as of December 12, 1997 (Exhibit 1 to Current Report on Form 8-K dated December 12, 1997)                                                                                                                                                                               
|4.1a * |  | Amendment No. 1, dated as of June 12, 2000, to the Rights Agreement between Tribune Company and First Chicago Trust Company of New York, as Rights Agent (Exhibit 4.1 to Current Report on Form 8-K dated June 12,
2000)                                                                                                                                                             
|4.2 *  |  | Indenture, dated as of March 1, 1992, between Tribune Company and Citibank, N.A. (successor to Bank of New York, Bank of Montreal Trust Company and Continental Bank, N.A.), as Trustee (Exhibit 4.1 to Registration Statement on
Form S-3, Registration No. 333-02831)                                                                                                              
|4.3 *  |  | Indenture, dated as of January 1, 1997, between Tribune Company and Citibank, N.A. (successor to Bank of New York), as Trustee (Exhibit 4 to Current Report on Form 8-K dated January 14, 1997)                                                                                                                                                                                      
|4.4 *  |  | Indenture, dated as of April 1, 1999, between Tribune Company and Citibank, N.A. (successor to Bank of New York and Bank of Montreal Trust Company), as Trustee for the PHONES securities (Exhibit 4 to Current Report on Form 8-K
dated April 5, 1999)                                                                                                                              
|4.5 *  |  | Indenture, dated January 30, 1995, between Tribune Company (successor to The Times Mirror Company) and Citibank, N.A. (successor to The Bank of New York, Wells Fargo Bank, N.A. and First Interstate Bank of California), as Trustee for
the 71/4% Debentures due 2013 and 71/2% Debentures due 2023 (Exhibit 4.1 to The Times Mirror Company's Annual Report on Form 10-K for 1995)
|4.5a * |  | First Supplemental Indenture, dated as of June 12, 2000, among Tribune Company, The Times Mirror Company and The Bank of New York, as Trustee (Exhibit 4.13 to Current Report on Form 8-K dated June 12, 2000)                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                                                                                                      

117

---



|4.6 *    |  | Indenture, dated March 19, 1996, between Tribune Company (successor to The Times Mirror Company) and Citibank, N.A., as Trustee for the 6.61% Debentures due 2027 and the 71/4% Debentures due 2096 (Exhibit 4.1
to The Times Mirror Company's Current Report on Form 8-K dated March 19, 1996)                                             
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.6a *   |  | First Supplemental Indenture, dated as of October 19, 1999, between The Times Mirror Company and Citibank, N.A., as Trustee (Exhibit 4.3 to The Times Mirror Company's Current Report on Form 8-K dated October 19,
1999)                                                                                                                   
|4.6b *   |  | Second Supplemental Indenture, dated as of June 12, 2000, among Tribune Company, The Times Mirror Company and Citibank, N.A., as Trustee (Exhibit 4.12 to Current Report on Form 8-K dated June 12, 2000)                                                                                                                                   
|4.7 *    |  | Agreement of Resignation, Appointment and Assumption, dated as of September 4, 2002, among Tribune Company, The Bank of New York and Citibank, N.A., appointing Citibank, N.A. as Trustee under the Indentures dated March 1, 1992,
January 30, 1995, January 1, 1997 and April 1, 1999 (Exhibit 4.7 to Annual Report on Form 10-K for 2004)
|4.8 *    |  | Form of Exchangeable Subordinated Debenture due 2029 relating to the PHONES securities (Exhibit 4 to Current Report on Form 8-K dated April 13, 1999)                                                                                                                                                                                       
|4.9 *    |  | Specimen Note for 71/4% Debenture due 2013 (Exhibit 4.2 to The Times Mirror Company's Annual Report on Form 10-K for 1995)                                                                                                                                                                                                                  
|4.10 *   |  | Specimen Note for 71/2% Debenture due 2023 (Exhibit 4.3 to The Times Mirror Company's Annual Report on Form 10-K for 1995)                                                                                                                                                                                                                  
|4.11 *   |  | Officers' Certificate, dated November 13, 1996, establishing the terms of the 71/4% Debentures due 2096 and attaching the specimen Form of Debenture (Exhibit 4.2 to The Times Mirror Company's Current Report on
Form 8-K dated November 13, 1996)                                                                                         
|4.12 *   |  | Officers' Certificate, dated September 9, 1997, establishing the terms of the 6.61% Debentures due 2027, and the specimen Form of Debenture (Exhibit 4.2 to The Times Mirror Company's Current Report on Form 8-K dated
September 9, 1997)                                                                                                  
|4.13 *   |  | Form of Note relating to Tribune Company's 4.875% Notes due 2010 (Exhibit 4.1a to Current Report on Form 8-K dated August 15, 2005)                                                                                                                                                                                                         
|4.14 *   |  | Form of Note relating to Tribune Company's 5.25% Notes due 2015 (Exhibit 4.1b to Current Report on Form 8-K dated August 15, 2005)                                                                                                                                                                                                          
|10.1 o*  |  | Tribune Company Supplemental Retirement Plan, as amended and restated January 1, 1989 (Exhibit 10.6 to Annual Report on Form 10-K for 1988)                                                                                                                                                                                                 
|10.1a o* |  | First Amendment to Tribune Company Supplemental Retirement Plan, effective January 1, 1994 (Exhibit 10.4b to Annual Report on Form 10-K for 1993)                                                                                                                                                                                           
|10.1b o* |  | Second Amendment to Tribune Company Supplemental Retirement Plan, effective October 24, 2000 (Exhibit 10.2b to Annual Report on Form 10-K for 2000)                                                                                                                                                                                         
|10.2 o*  |  | Tribune Company Directors' Deferred Compensation Plan, as amended and restated effective as of January 1, 2005 (Exhibit 10.2 to Current Report on Form 8-K dated December 22, 2005)                                                                                                                                                         
|10.3 o*  |  | The Times Mirror Company Deferred Compensation Plan for Non-Employee Directors (Exhibit 10.7 to The Times Mirror Company's Annual Report on Form 10-K for 1994)                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                             

118

---



|10.4 o*   |  | Tribune Company Bonus Deferral Plan, as amended and restated as of January 1, 2005 (Exhibit 10.3 to Current Report on Form 8-K dated December 22, 2005)                                          
|--------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5 o*   |  | Tribune Company 1992 Long-Term Incentive Plan, effective as of April 29, 1992, as amended April 19, 1994 (Exhibit 10.11 to Annual Report on Form 10-K for 1994)                                  
|10.5a o*  |  | First Amendment to Tribune Company 1992 Long-Term Incentive Plan, effective October 24, 2000 (Exhibit 10.6a to Annual Report on Form 10-K for 2000)                                              
|10.6 o*   |  | Tribune Company Executive Financial Counseling Plan, effective October 19, 1988, as amended January 1, 1994 (Exhibit 10.13 to Annual Report on Form 10-K for 1993)                               
|10.7 o*   |  | Tribune Company Transitional Compensation Plan for Executive Employees, amended and restated effective as of January 1, 2005 (Exhibit 10.1 to Current Report on Form 8-K dated December 22, 2005)
|10.8 o*   |  | Tribune Company Supplemental Defined Contribution Plan, as amended and effective as of January 1, 2004 (Exhibit 10.8 to Annual Report on Form 10-K for 2004)                                     
|10.9 o*   |  | Tribune Company Employee Stock Purchase Plan, as amended and restated July 27, 1999 (Exhibit 10.10 to Annual Report on Form 10-K for 1999)                                                       
|10.9a o*  |  | First Amendment to Tribune Company Employee Stock Purchase Plan, as amended and restated July 27, 1999 (Exhibit 10.10a to Quarterly Report on Form 10-Q for the quarter ended September 24, 2000)
|10.9b o*  |  | Second Amendment to Tribune Company Employee Stock Purchase Plan, effective as of May 7, 2002 (Exhibit 10.8 to Annual Report on Form 10-K for 2002)                                              
|10.10 o*  |  | Tribune Company 1995 Nonemployee Director Stock Option Plan, as amended and restated effective December 9, 2003 (Exhibit 10.9 to Annual Report on Form 10-K for 2003)                            
|10.11 o*  |  | Tribune Company 1996 Nonemployee Director Stock Compensation Plan, as amended and restated effective January 1, 2005 (Exhibit 10.4 to Current Report on Form 8-K dated December 22, 2005)        
|10.12 o*  |  | Tribune Company Incentive Compensation Plan, as amended and restated effective May 12, 2004 (Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 27, 2004)                  
|10.12a o* |  | Form of Notice of Grant and Stock Option Term Sheet (Exhibit 10.1 to Current Report on Form 8-K dated February 11, 2005)                                                                         
|10.12b o* |  | Form of Restricted Stock Unit Award Notice (Exhibit 10.1 to Current Report on Form 8-K dated February 21, 2006)                                                                                  
|10.13 o*  |  | The Times Mirror Company 1997 Directors Stock Option Plan (Exhibit 10.15 to The Times Mirror Company's Annual Report on Form 10-K for 1996)                                                      
|10.14 *   |  | Limited Liability Company Agreement of TMCT, LLC, dated August 8, 1997 (Exhibit 10.1 to The Times Mirror Company's Current Report on Form 8-K dated August 8, 1997)                              
|10.15 *   |  | Lease Agreement between TMCT, LLC and Times Mirror, dated August 8, 1997 (Exhibit 10.4 to The Times Mirror Company's Current Report on Form 8-K dated August 8, 1997)                            
|          |  |                                                                                                                                                                                                  

119

---



|10.16 *  |  | Amended and Restated Limited Liability Company Agreement of TMCT II, LLC, dated September 3, 1999 (Exhibit 10.1 to The Times Mirror Company's Current Report on Form 8-K dated September 3, 1999)                                                                                              
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.16a * |  | First Amendment to Amended and Restated Limited Liability Agreement of TMCT II, LLC, dated as of August 14, 2000 (Exhibit 10.17a to Annual Report on Form 10-K for 2000)                                                                                                                       
|10.16b * |  | Second Amendment to Amended and Restated Limited Liability Agreement of TMCT II, LLC, dated as of August 1, 2002 (Exhibit 10.14b to Annual Report on Form 10-K for 2002)                                                                                                                       
|10.17 o  |  | Mutual Separation Agreement by and between Patrick Mullen and Tribune Broadcasting Company dated October 21, 2005                                                                                                                                                                              
|14 *     |  | Code of Ethics for CEO and Senior Financial Officers (Exhibit 14 to Annual Report on Form 10-K for 2003)                                                                                                                                                                                       
|21       |  | Table of Subsidiaries of Tribune Company                                                                                                                                                                                                                                                       
|23       |  | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                       
|31.1     |  | Rule 13a-14 Certification of Chief Executive Officer                                                                                                                                                                                                                                           
|31.2     |  | Rule 13a-14 Certification of Chief Financial Officer                                                                                                                                                                                                                                           
|32.1     |  | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                                                          
|32.2     |  | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                                                          
|99       |  | Form 11-K financial statements for the KPLR, Inc. 401(k) Plan, the Times Mirror Savings Plus Plan, the Tribune Broadcasting Retirement Plan, the Tribune Company Defined Contribution Retirement Plan and the Tribune Company 401(k) Savings and
Profit Sharing Plan (to be filed by amendment)

120

---



QuickLinks